I think EJ explained it perfectly the other night. When you are undersized or are trying to find a role on the team you have to be willing to go outside your comfort zone and find a niche that the team doesn’t already have. That is what Harrison has been bringing with his high intensity defense and Ulis has not been able to find anything to make him valuable.
Ulis' contract isn't guaranteed next season so it's unlikely they'll keep him based on how he's played this year as well as him falling out of the rotation completely of late. You'd think he would still see some playing time to try and compete for his job next year though. The Suns lack depth at PG this season so it's not like he couldn't be used. It's an odd time for the front office to have already decided on moving on from him considering this is just his 2nd season and he was just a 2nd round pick. His upside isn't that high but he appeared to be a much better player as a rookie than he has this year. He did have offseason surgery but it's too late in the season to blame his play on that still. He's only set to make $1.5 million next season also, which isn't much at all and it would cost that much to sign a veteran backup PG.
During the end of his rookie year it looked like he might be the PG of the future for the team when he averaged 16.1 ppg with 8.5 apg, 1.2 steals, and 2.5 turnovers on 42% shooting in the 15 starts he made after Bledsoe was sat to tank. This year in his 37 games as a starter he's only averaged 7.0 ppg, 4.3 apg, 1.1 steals, and 1.7 turnovers on 38% shooting. Something has happened and he's regressed but he may be able to bounce back. His upside isn't very high though, he's a career backup but it isn't really a bad thing to have the same PG manning your 2nd unit for a few years. It brings about a continuity amongst reserves.