Looking back, how many seasons have the Bills been in legitimate "cap jail?" I don't recall any, at least in the Nix/Whaley era. They've had the money to, for example, sign Mario Williams to a record breaking deal, and he produced admirably during his time here, at least until he became a malcontent.
I agree with mjt - the biggest problem with the current regime (and, frankly, pretty much all the previous regimes since the drought began) is poor college scouting and drafting. The misses on QB alone in the very recent past (Carr, Prescott) makes me doubt Whaley and his people more than any questionable free agent signings or resignings.
Oh, and stop making Overdorf the scapegoat. It's a popular hobby around here. He doesn't do anything unilaterally. Sure he has input into contract structures and such - he's the one negotiating them. But to think he can override the roster decisions of GM or ownership and pick who to pay is a little nuts.