There are a ton of good reasons why this deal makes perfect sense for all parties involved.
From Houston's perspective:
They discovered something when they got to the playoffs, they discovered that their rookie QB TJ Yates might be something special down the road. I bring this up only because Matt Schaub is 30 years old and will become a Free Agent in 2013 so they must resign him this year. A 30 year old QB will not sign anything less than a 5-7 year deal so where does that leave them for Yates? The other obvious thing here is that Schaub will not be interested in mentoring Yates, why should he?
What if they could sign Peyton Manning to a 3-4 year deal? Obviously Peyton knows that it's the last contract and he'd be more than willing to mentor the young Yates. Would anyone be better suited to mentor the young lad? Manning instantly puts them at the dance. With Manning at the helm, with that running game, Andre Johnson & Owen Daniels and most importantly that incredible O-Line, the Texans could be a force to be reckoned with on offense. Manning has never had such a balanced team to work with, they could easily be going to the next 3-4 Superbowls.
Right now the RGIII sweepstakes are heating up big time. If Houston was to give WAS a call and offer up Matt Schaub for their 1st, I am pretty convinced that both Shany's would jump all over it. They don't have 2-3 more years to prove themselves, they need to be able to compete in 2012 if they want to save their jobs and signing Matt Schaub, a proven top 10 QB who has experience in the Shanahan system. He could come in running! There is no way that WAS would pass-up that opportunity.
So now Houston has Peyton Manning locked up for 3-4 years and they have two first round draft picks at their disposal. With the 6th overall pick they could easily move to get Blackmon to pair up with Andre Johnson and Owen Daniels. They still would have the 26th pick to possibly shore up any other position they might need.
There really is no downside from Houston's perspective.
From Peyton's point of view
He wants to stay in the AFC where he is familiar with his opponents. This way he even gets to stay in the same division that he has dominated for so long. Peyton is looking for one thing only for his next team, the possibility to win multiple rings before the end of his career. There is no better spot right now then Houston. They have a top 3 Defense, a great offensive line, a great running game, a top 2 receiver a top 10 TE, solid depth at every position, solid management, solid coaching on both sides of the ball. On the personal front, the proximity of Houston to his home town in Mississippi would be a great way to end his career.
I can't see a better place for Peyton than the Houston Texans, for the Texans - it would position them for multiple Superbowls and more importantly, with Peyton mentoring TJ Yates for 3-4 years, I believe that you could see another Aaron Rodgers type success after Peyton retires. Heck, we all know that Peyton will probably become a coach after he retires, maybe he stays on after he retires as the OC for his young protegee?
Houston holds the cards to their own destiny, will they have the courage to attempt the leap?