It appeared that Fine is developing into a receiving threat. Given he was a mid to late round rookie, he did fairly well IMHO. I do agree with you that Royal should have been permanently benched and Fine should have played the last several games. I am not entirely confident in the coaches' ability to identify talent, which is why I want Royal cut outright to leave the coaches with little option but to play Fine.
Finally, the TE should not necessarily be a down field threat by default. If he covers the short to medium area of the field well, then it will open up the deep game for speedsters like Evans. My preference would be to cut Royal, get another TE, an experienced WR and promote Steve Johnson (another example of someone who should have played a lot more than he did).