Because it will kill your cap if they have a very high signing bonus.
Always check what the penalty will be. If the player costs 5 million on the cap, and the penalty is 3 million, you would save only 2 million by cutting him, and would still have to pay the 3 for that season.
Let's say you have a bust, $25 million (5 mil a year), 5 years, $10 million signing bonus. The signing bonus is spread out evenly throughout the 5 years.
If you cut him in year 2, you'd have a 8 million penalty despite only having $5 mil against the salary. Cutting the player would cost you an extra $3 million. It would be cheaper to keep him on the roster, even if he is a bust until you can at least split even on him.