That's basically how I feel... he's a captain of the team, great guy, does a lot of things well... but he's not much of a runner anymore (or at least wasn't last season), even if he did gain the most yards, his ypc was pretty poor, and frankly the eye test didn't show burst very often. In the perfect world, we'd keep him as our second back, and either Brown goes to 1st string, or we find someone cheap to be productive.
But I could definitely see the Bills cut Fred, have Brown as #1 or #2, and either signing a FA, or drafting a guy to go along with Dixon in completing the unit. Saved money could be used to shore up the line, throw towards the defense, go after a TE, etc. It really depends on how close we get to the cap looking to improve the team elsewhere. I'd hope, that if he is cut, Fred would be a last ditch cap casualty, unlike say, Rivers (who sucks, and is already cut).