Like you, my initial reaction was surprise that Alex would get the Repsol ride. But after further thought, it makes more sense.
Honda didn't have a lot of options because the entire field is in the middle of contracts that expire after next year.
Crutchlow? He's probably going to retire after next year. So one year putting up with a rider who is blunt in his criticism of the bike and crashes a lot. You know there's no long-term future there, so why put up with the bother for one year?
Zarco? If he couldn't adapt to the KTM, there's reason to fear he would not be able to adapt to the Honda. Actually, nobody but Marquez has, just as nobody but Stoner could win races on the Ducati. If Lorenzo and the Honda were a mismatch made well south of heaven, then Zarco and the Honda seem an even more unlikely match.
Bautista? Honda needs him more in WSBK, don't they? Plus, his second-half meltdown didn't burnish his reputation.
Alex Marquez just won the Moto2 title, and the obvious thing to do after that is move up to MotoGP. Clearly, moving to a factory team, even the top factory team, is not the obvious thing. But I can see the logic in Honda's decision. There's one person in the world who can ride their bike to victory consistently. This decision keeps that one man happy and it's not like they had an obviously better option.
All JMHO.