While I believe more of it was media driven than team driven, there was some smoke about Cutler replacing Plummer this year. Three years (your post) in NFL terms before starting a high draft pick is unheard of in the modern era unless he has injuries. I can't name one guy drafted as high Cutler who was not handed the job (deserved or not) in the last 10-12 years.
As for more good games than bad, that was not really the problem. It was the fact his bad game(s) seemed to come at the worst possible moments.
If Shanahan drafted Cutler to replace Jake, he would have done so by now, with the way Jake had been playing earlier this year.
They had a winning QB when they drafted Cutler.... they were happy with him then, & are happy with him now. They saw something in Cutler that they thought was special, and they understood QBs like Cutler don't come along all the time. They had the capitol to trade up, they didn't have any glaring needs that they would be ignoring, it made sense to move up to get him.
If they are happy with Jake, I see no reason for them to terminate his contract early.... Unless they get a good trade, which they might.
If they are winning, I see no reason for them to start a young QB.
They gave Jake a $7 million bonus in 2003, and a $6 million bonus in 2005, then they went 13-3 in 2005, and Jake is signed through 2010.
If it doesn't make sense to sit Cutler, it makes even less sense to sit Plummer. He will most likely start this year, and next, & it would make sense to trade him for the 2008 season.
But if he ever gets hurt, and Cutler ever gets to play...... he may not get the opportunity to play for Denver again...... like what happened to TrentGreen in StL, and again in KC this year.