Think of Hernandez as a big 3rd WR more than anything. A mismatch. These guys like Hernandez and Finley can block, just creatively - not in a 3-pt. stance next to the tackle.
I am happy that everyone keeps pumping Gronkowski - keeps the price on Hernandez low for the time being.

Hernandez has decent strength and can be an adequate blocker in space, but won't ever be the TE lining up in three point stance taking on the defensive ends and tackles. That is ok, he doesn't need to be that player as that is the role that is reserved more for Gronk, Crumpler, and now rookie Lee Smith. Gronk will see more snaps then Hernandez, which is also ok as a significant number of Gronk's snaps are blocking plays and you don't get points for him laying a nice block that frees up Hernandez to streak down the field for the touchdown.
Gronk is a very good player and has significant fantasy potential and he is the better all around TE to be sure, but he will be drafted in fantasy drafts ahead of Hernandez and according to current ADP data. Gronk will be selected significantly enough ahead of Hernandez that draft value in 2011 becomes a big factor in evaluating both players. I love the bashing of Hernandez, as it will hopefully drive his price down enough that he will then become a player who will be poised to exceed his ADP and will be the type of player who can help fantasy owners to win championships.
Those who are predicting Hernandez to be "worthless" make me laugh. For Hernandez to fall off the face of the earth means one of a few scenarios:
1. Major Injury
2. Patriots failing to utilize a player who was very productive last year and is continuing to develop in an offensive scheme that can utilize three TEs and is designed with specific plays designed for a hybrid TE like Hernandez
3. Major regression in work ethic, ability, etc.
4. A substantial drop in opportunities (targets) for Hernandez.
Branch will be 32 when the season starts and Welker turned 30 earlier this year. They are reliable players, but both are aging and either declining or on the cusp of declining. The other Patriots WRs haven't developed to the point where they scare opposing defensive coordinators. Hernandez entered the NFL at 20 years of age and immediately stepped in and produced which is rare (historically) for the TE position. Could Hernandez fall apart and become the TE equivalent of Michael Clayton? Sure he could, but it seems unlikely.
I like both Gronk and Hernandez as they have Brady who is a top QB and a system that is designed to utilize both of their skill sets. Gronk is likely the safer player and is easy to like with his proven red-zone skills, but he isn't a lock to hit 10 TDs again. Hernandez didn't see the field as much as Gronk did last year, but that is a good thing as he has potential to see a jump in his involvement in the offense with his continued development and assuming he stays healthy. Reports last year indicated that both Gronk and Hernandez had great work ethic and were very coachable and the Patriots felt like they had hit on two players who would make significant offensive contributions for years to come.
Hernandez plays more like the new hybrid style of TE similar to Finley, Keller, etc. and he has career potential similar to these players. To completely blow him off is the risk of allowing your own personal bias to creep into your player evaluations. I learned a long time ago that I needed to not be overly critical of players I personally didn't like, as I had a tendency to bump them down too much and conversely I tended to over value players that I personally liked.
I did find this article that touches on the reasons why TE involvement in the offense in the NFL has been taking off. It is worth a read:
Three Tight End Offensive Formation