He must really like something he sees or senses about McCarthy. He already has McNamara, who led them to a very successful season, minus the bowl game, and included finally beating their rival and he's futzing around with an untested QB who had some shoulder problems in the Spring. Maybe the kid is THAT good, but it certainly can't instill much confidence in last year's starter.
You partially answered your own own question ("...maybe he is THAT good..."). JJ has physical abilities that Cade does not have nor can fake. JJ has 1st round physical talent and it's really only a question if he has the intangibles to match.
This issue has been, with zero doubt, the most devisive amongst Michigan fans not only this past off-season but pretty much since JJ stepped on campus. One thing I can assure you though: Even amongst the "Cade contigent" (the side I tend to lean towards), it is recognized that JJ is the future and its more a matter of when than if. And it has zero to do with his teammates not believing in Cade who was just voted a captain, this past week, by the players.
Now the reason I'm making such a long post about this here (besides responding to something already posted) is because it has multiple implications to Iowa both past and present.
First, you guys went through something similar with Beathard and Rudock. Though (assuming I remember correctly) KF handled it differently by simply handing the job to Beathard (when KF thought he was ready) and telling Rudock to find a new place to play. Harbaugh is giving JJ a chance to earn it on the field (as the second guy in) and if he proves not to be ready then will continue to ride Cade who he knows he can win with. It will be interesting to see how the two different approaches work out in hindsight.
A second relevant to Iowa topic is the role of the mobile QB in today's college game. I have seen the argument made on your board, ad nausea, that Iowa should target QBs (in recruiting) that can run. It's not only that JJ has the stronger arm (which he does without question) but he is a true dual-threat who you can design a diverse run package for and around him. Many fans, and apparently some of the staff, believe it is needed to get to the next level.
In the end, this really is about a top notch game manager vs. a guy who simply has certain physical tools the other guy doesn't. If all non-measurables are equal of course the answer is simple. But they rarely are and both our HCs have shown tendencies to go the safer route - don't turn the ball over, stay ahead of the sticks, don't consider a punt a bad play, etc. What happens with the Cade/JJ situation will not be a definitive answer to how much risk is acceptable (as all situations are different and while Cade is pretty rock steady its not like JJ has proven to be some wild west gunslinger who throws all caution to the wind) but at the very least it should give an anecdotal example to Iowa fans of how they should handle your QB situation.