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Now, I don't think Montero is a bad athlete, but Piazza wasn't gonna be plus with a glove anywhere.  Is it better to be a bad-gloving 1B than a bad-gloving C?  I don't think so.  There's only so bad you can be on defense (and be allowed to play a glove position).  
Like you said, positional value is huge, and Montero gives away a lot if he goes to DH or 1B.  If he has to, fine, but does he have to?
I don't see any way Montero can lose so much defensive value (assuming he can call a reasonable game, throw out 20-25% of base stealers, block the plate, etc...which he already does) that he can't dwarf that loss with offensive value.  Positional adjustment alone is enormous and then what Jesus can do with that sweet, sweet swing on top of that?  Priceless.
Maybe he's below the threshold, and simply CANNOT play the position.  I haven't seen that yet.
Show me.  That's all.  I'd be happy with 100% DH Montero, but 50% C / 50% DH Montero is worth a couple of extra wins easily, and we need to squeeze all the wins out of this roster that we can.
~G