I don't agree with playing Rutledge over Racine and Janecyk simply because he's the scholarship goalie. That's like saying Red should have been playing Milne over the other walk-ons because he was on scholarship, too. Red doesn't just hand out playing time--you have to earn it. Heck, he benched Guptill for a weekend last month because he said he didn't like the way he practiced all week.
Rutledge hasn't had as many starts as Racine, but he hasn't done anything game-wise to earn them, either. I would think, given our goaltending situation, when he is given a chance he would step up to the plate and show why he should be starting more often. Instead, he ends up doing just the opposite. In his five starts he's given up 5, 4, 1, 7, and 5 goals (not to mention another 5 goals against the NTDP). Red's going to play the players he feels gives the team the best chance to win. I know this season is at a loss right now, but the boys are still going out there trying their best to turn things around, and I don't think it would be fair to he rest of the team to be forced to play with the goalie who is struggling most simply because he's on scholarship.
As for that scholarship, I agree with Red in honoring it. Look at what's going on with football this past week with Tuberville yanking scholarships of Cincy recruits (without telling them, no less) and a USC recruit and I'm sure there'll be more. Pulling a scholarship because the kid is underperforming sets a dangerous precedent, IMO. It can cause a lot more damage in the recruiting world than good. On top of that, why are we only targeting Rutledge when there's about 15 other players on scholarship underperforming this season?
I still think it's important to keep Rutledge around for another year and see if he can pull a Billy Sauer or Brendan Gibbons and turn things around. Remember, Sauer crashed and burned his freshman and sophomore years (and most memorably got publicly hammered by T.J. Hensick for it during the NCAA tournament with his "I don't know what's going on there..." remark). But once those guys graduated and new leadership took over (Porter/Kolarik) and the whole team attitude seemed to change (IIRC, Kolarik made remarks about lack of team unity off the ice), Sauer's game improved dramatically, to the point he was setting U-M records. Even his senior year, though the team couldn't score worth a lick in front of him, Sauer wasn't necessarily playing bad (he still put up good numbers despite not winning).
Remember, there's no new goalie help coming in next fall, so if you force him out, you're still left with Racine and Janecyk, and neither of them have proven to be a #1 goalie, either. I think Mike said in another thread that the talent is still there with Rutledge, but his confidence is shot. Maybe he's just not ready to handle the D-I level this year (IIRC, he also had a setback prior to the season with eye surgery or something...not sure if that has had an effect on his play). I don't think putting Jared out there giving up five goals a game is going to help him. Not every goalie is ready to step in as a true freshman, even though we've always kind of made that the norm at Michigan. Perhaps benching him and giving him more practice time and hitting the reset button over the summer would better serve him, and hopefully he can rediscover that talent he showed while with the NTDP.