They lost 99 games, and didn't fill a single hole. They replaced Cuddeyer and Kubel, but did not upgrade 1 spot by adding players. Yes, Plouffe is better than Valencia, but that is just good luck. I don't know what people were expecting, other than this. This season was built entirely on hope, and hope is not a strategy.
They did, though. They picked up a kick-a$$ replacement for Cuddy in Willingham, got a better offensive back-up catcher in Doumit, stabilized their middle-infield in regards to fielding and veteran presence in Carroll, and they picked up Gray, Burton, and Fien to help out Perkins, Burnett and Capps in the bullpen, which was one of the huge problems last year.
Unfortunately, you are still right that the Twins didn't fill a single hole in the Starting Rotation. They were just kind of hoping that in-house options and Marquis would be able to cut it. After seeing Hendriks, Blackburn, April/May of Liriano, and god-awful Marquis, the Twins hopefully realized that if they want to compete in this extremely winnable division and against high-payroll, high-talent teams like the Yankees, Rays, and Rangers, they need to pick up a good front-line starter to pair with guys like Diamond who have shown themselves to be capable starters.
Honestly, if Baker had managed to stay healthy, Liriano had shown at the beginning of the year that he can pitch like he is now doing, and the Twins had kept Diamond up with them when they broke from ST, they might be a lot closer to competing than they are right now, because three above-average pitchers like they are could probably keep them afloat if they mixed in guys like Walters and Hendriks, whenever he figures things out.
Seriously, if I were the Twins, I would trade Liriano, then try and re-sign him when he becomes a FA, because he is a #1 starter when he cam hold it together. However, I don't think that the Twins should just stop at resigning Liriano after the season. If Baker can show that he can remain healthy and be effective, they 1) should not accept his option and 2) resign him on a one-year deal kind of like Liriano's for this year to prove that he can stay healthy for a full season. If the Twins then went out and got a guy like Anibal or Jonathan Sanchez, they would have four fairly good starters and people would believe that they would have a chance at competing for the central and then plop in a WIP in the #5 hole, because you could afford to have a guy who they think will be a starter but hasn't quite put everything together yet (like a Liam Hendriks).
Therefore this is what I would have the Twins rotation look like next year:
3. Baker if healthy, FA pitcher if Baker isn't healthy; also could be a guy like Hendriks when he figures things out.
4. for sure a FA pitcher (not necessarily me saying the Twins should sign a #4 guy in the rotation)
5. guy like Hendriks/Deduno/DeVries/Walters who can be relied upon to make a start every five days, but not be more than a ceiling #4 guy
P.S. Yes, this is my way of saying that the Twins should keep Blackie in the Minors or trade him if possible, because he has not been able to keep his sinker around for a full season (not saying that that is even possible, but he should be more consistent that what he has shown the Twins the last few years if he wants to be a MLB Starter).