Calvin Pace was probably never going to match the contract the Jets gave him as a free agent in 2008. Gang Green overpaid, and they probably knew it at the time. The team had plenty of cap space and was in desperate need of an infusion of talent so big money was spent on a free agent class that included Pace, Alan Faneca, Damien Woody, and Tony Richardson in addition to trades for Kris Jenkins and Brett Favre.
Pace was the last remaining big gun brought in that offseason. His story ended up being similar to that of Bart Scott. While he did not play to the level of his contract early in his Jets career, he was still a pretty productive player those first three years, registering 20.5 sacks and forcing 9 fumbles in 40 games while doing a very good job setting the edge against the run as a linebacker in Eric Mangini's and then Rex Ryan's 3-4 defense.
Pace's play has dropped off recently, and his game has gone into decline. Like with Scott, Mike Tannenbaum painted the Jets into a corner. With both players, the initial contract was a bit too much but nothing to get upset over. Tannenbaum, however, kept moving money around on their deals to create short term cap space. He kept moving the cap hit back until he was left in 2012 with both players taking up a large chunk of cap space, not able to be cut due to the cap, and playing like they were in steep decline.
I do not see any reason for bringing back Pace for many of the same reasons bringing Scott back would be a bad idea. The Jets have a finite number of spots in training camp. As many as possible should go to young players to try and find young, under the radar talent. Pace is old and in decline. The Jets probably could have used one of the younger linebackers on the roster instead of Pace this year and gotten the same level of production. It was a nice little run, but it is time to move on.