The Pittsburgh Penguins signed Paul Martin and Zbynek Michalek. The New Jersey Devils signed Henrik Tallinder and Anton Volchenkov. The Philadelphia Flyers traded for Andrej Mezaros. The Ottawa Senators signed Sergei Gonchar. San Jose re-signed Joe Pavelski and Patrick Marleau ahead of free agency. The Capitals signed Dany Sabourin...to play in the AHL, no less.
At first glance, this seems like a disaster for the organization. The main competition in the East got a lot better on the blueline, and with the Caps likely to shoot less efficiently next season (they had a very high team shooting percentage) and see, believe it or not, similar goaltending (Theodore had the same even strength save percentage as Martin Brodeur, and Varlamov probably can't play much better than that), we should expect the Caps' greatest strength--the offense by which they overpower most every team in the regular season--to be greatly neutralized.
Wait a second. Or a few days. Or a few weeks.
Firstly, those teams that made the big splashes lost key pieces as well. New Jersey had lost Paul Martin and Tallinder and Volchenkov will not be able to replace his offense, though their defense may be better, on paper at least. Pittsburgh, still not having replaced neither Hal Gill nor Rob Scuderi (Jay McKee blocked shots but wasn't the same quality of defenseman) from two seasons ago, lost Gonchar as well and thus had to upgrade on defense (plus added years of experience and growth to Golisoski, Letang, and Orpik plus Lovejoy). Ottawa lost Volchenkov and, not having been able to contain Crosby in their playoff series this season and unpredictable in goal, needed another defenseman (though Gonchar appears to be regressing). And so on.
What do the Capitals have? Well, it appears that by the end of this past season the team was icing at least three top-4 defensemen in Mike Green, Jeff Schultz, and Tom Poti, plus one legitimate bona-fide top-pairing man in Green (Schultz technically is, but ideally probably a second pairing guy). By April 2011 it's not unrealistic to think Washington could have five top-four defensemen in Green, Schultz, Poti, John Carlson, and Karl Alzner.
That's pretty good.
What is missing is another defensemen, since John Erskine and Tyler Sloan should not be regulars on a championship team, ideally (though Philadelphia and Chicago pretty much rode four and five defensemen, respectively, to the Stanley Cup Finals). With Willie Mitchell still unsigned and a strong group of free agent defensemen next season coming up, the Capitals have plenty of time (until next trading deadline) and opportunity, plus supply, of presumably available players.
What about the second line center to play with Alexander Semin? Well, when Matthew Lombardi might have been the best UFA center out there, you know the class is pretty weak (Patrick Marleau was re-signed by San Jose just a few days before free agency opened). No use for George McPhee to overpay, with significant term, to a guy who absolutely needs talent on his wings to put up good numbers. And what if Marcus Johansson or Mathieu Perreault are good enough, right now, to play 2C? Then McPhee has just wasted some significant cap space.
Fact is, with Johansson and Perreault (according to management) so close to ready if not ready right now to play top-6 forward minutes in Washington, they might as well be given a shot. The Capitals have the assets to go after one of these guys at the deadline if Perreault and Johansson don't provide a solid fix at the position.
So, in short, what did happen? McPhee played it safe. He made sure that for the foreseeable future the Capitals will be able to construct a contending team while staying under the salary cap. Not overpaying (with term) now means keeping Ovechkin, Backstrom, Alzner, Carlson, Green, Schultz, Fehr, and others later. That's a pretty good core of players.
And let's not forget that with the re-signing of Nicklas Backstrom the Capitals did, in fact, land the best pending free agent (as of May 2010) on the market.