Davis37, that quote is from the Football Outsiders Power Rankings on FOXSports.com. Houston currently lie 31st, ahead of only the '9ers, but I believe that DVOA (the main stat FO uses to rank teams) doesn't make quite as much adjustment for strength of schedule as it should (although making any at all is a big improvement over most stats) so we should probably be a few places higher. I certainly believe we're a better team than the Packers, for one.
As has already pointed out, any quarterback is going to struggle behind an O-line as porous as ours against top flight defenses like the two we've faced. I expect we'll lose to the Bengals, because they show every sign of being an excellent team, but they don't have a pass-rush like Pittsburgh or Buffalo and our offense will look much better as a result. Not necessarily good, but better, and that will be the pattern for most of our remaining games (except against Indy). As for picking up the option, you may or may not be a fan of Casserly's, but he's not a moron. I don't expect us to pursue a veteran this summer, because, as ever, no good ones are likely to be available, with the qualified exception of Kurt Warner, who could still be a pro-bowl QB if he played behind . . . you got it, an offensive line that could protect him. That doesn't mean we'll take up the option on Carr - we'll offer him a new deal with a good deal less guaranteed money that will allow us to cut him if his performance is substandard or retain him at a reasonable price if (as will likely be the case) his performance is competent but no more. If Carr is cut, he will get a starting job elsewhere without too much difficulty - he may not be great, but he's not bad either, and you'd be a fool to let two bad games in almost impossible conditions convince you otherwise.