Maybe Morey had a computer glitch that said Terrence Williams was a perennial all star, and when they fixed the glitch, they realized he was a titty baby with no work ethic.
In all seriousness though, it really is strange; it seems like the SFs with a do-it-all game/mentality (Earl Clark, Williams, Lamar Odom, etc) have a really hard time adapting their games to the NBA. Elite level talents w/ a do it all game are great; but, you want your role players to be exactly that, ROLE players. When you have a guy who isn't one of your top options, it's hard to clearly define a role for them, and as a young player finding their way, especially if they have "attitude" problems, that can get in the way.
With all of that said, I think Williams will eventually be a good player. Just hope they're developing him this season and look to the future. The Rockets have a ton of young guys, and the more young guys w/ potential you have, the more likely you are to find a diamond in the rough.