Graves is an okay #4/5 defenseman, With the amount of depth the Devils have on the left side (Hughes, Siegenthaler, Muk, Okhotyuk, Bahl, Brendan Smith) it just doesn't make sense to pay $4M+ for a player that might not even be the 4th best LHD on the roster in a year.
Sure those guys are unproven but in a salary cap league you're always going to be relying on young players to develop into core and supporting pieces. Banking on an elite group of young LHD prospects to fill the position and using that $4M to lock up a more pressing need or to re-sign your more important players is a better use of cap.