I wrote this in another thread but it makes sense here as well:
Memphis had all kind of incentives to keep Miles:
- they'd take Portland out of the FA market next Summer (they're one of their few competitors)
- what they'd receive from the luxury tax revenue (by sending the Blazers into tax territory) would be enough to play half of Miles' salary
- they're a bad basketball team (their record is better than what they deserve) that can use any semi-decent player
However, not even all those factors were enough to convince Wallace to keep him. Although I didn't watch Miles playing for them, what I saw in the pre-season, as I repeatedly said, was someone very, very far from being athletic enough to play pro basketball (and not only in the NBA, I'm pretty sure that the pre-season Miles wouldn't find a spot in the Portuguese domestic league, for example). Unless he improved his condition by a lot since then, I can't see him anywhere near to be a contributor for a NBA team.