I don't think fit has anything to do with it. Melo is a bad player now regardless of fit and he has only himself to blame.
Players need to look after themselves and plan for their future as they get older. Adapt their games. Look after their body. Players who do not do so burn out much younger than they should. Like Antoine Walker did. This is what has happened with Melo.
During Melo's last two years in New York, he was the worst defensive forward in the league. This was while he was still scoring 20ppg. Given how bad his defense was, he was not improving his team way back then when still playing well on offense. Players have to become more positionally / fundamentally sound on defense as their legs get older and can cover less distance. Melo has never bothered to work on his defensive fundamentals. This is why he has only himself to blame.
Furthermore, when Melo was younger he was quite effective defensively when defending his opponent below 18 feet in large part due to his superior size and strength but struggled out around the three point line (again lack of defensive fundamentals) ... now the league is three point crazy and plays exactly where Melo has struggled most even during his physical prime and best defensive campaigns.
The next issue is with his offense. His ego is the problem here. He still thinks of himself (or at least did in OKC and HOU) as a 20ppg scorer and an All-Star talent. But he no longer has the legs to get around his opponents and get to the basket for easier hoops and FT attempts from drawing fouls. This leads to increase in contested jump-shots. Melo is one of the best contested jump-shooters in the league but this is the lowest percentage shot in basketball and he is relying on it more and more because his ego has stopped him from transitioning into a more role player friendly role.
Furthermore, in order to create some separation on those contested jump-shots Melo must hold the ball longer in order to size up his defender in order to make his move. This is typical for all scorers as they get older. They no longer have the quicks to get around people so they have to size him up and outsmart them. Same thing for guys like Charles Barkley. It makes Melo even more of a ball-stopper than he was in his prime (just as did with many other old timers such as Barkley).
Lastly, Melo hasn't taken good enough care of his body as he has gotten older. He was heavy in Houston, in OKC and during his final years in New York. He needed to slim down and get in better shape in order to play defense effectively.
Again, these are all self-inflicted issues. I love Melo. I really do. I have been a big fan of his throughout his career ... but his career is over and he only has himself to blame. His unwillingness to prepare for older age, to learn defensive fundamentals, to adapt his offensive game as he got older, to take care of his physical body in order to compete properly. All self inflicted.
Given how far behind the curve Melo was when he last played in the NBA and add to that his time away from the game, it is nearly impossible to see these issues being dealt with effectively enough to allow Melo to be a useful NBA player. I'd love it if he somehow pulled this off and got to finish his career on a better note (as I would have with Antoine Walker) but I doubt it and he only has himself to blame for this.