In general, I don't like projects that project to be good NBA players based on size and athleticism. That's what led us to the Jeromoe Moisos, Kedrick Browns, and J.R. Giddenses of the world.
Still, if there's anyone to train someone on the job, it's KG. So I think that had a large role in DA making this choice. If KG was going to leave or retire, I don't know if DA makes this move.
As for PJIII, some scouting reports talked about him coasting during some games and potentially not putting forth his best effort. While PJIII may be ahead of Fab Melo, that certainly wouldn't have flown with KG. And given KG's history of not only hating, but shunning players like that (Paddy), I think that might have dissuaded Danny from rolling the dice on him, despite his talent.