It's a 53 man roster. Plenty of room for Green. Long gone are the days of fielding the same 11 guys game after game or even within one game. The Colts (and most other teams) rotate players so much on defense both on the front end and the back end, that when we watch games we can hardly keep track of who's on the field.
When it comes to Green's ability, or usefulness, I'm surprised that so many fans assume that what he was in his rookie year is all he will ever be. There have been many good to great Colt players who were not great or good in their rookie years.