Seemed legit to me. The Spurs had invested two years of time and money into developing Hairston, they were looking to get younger, cheaper and more athletic and they wanted/needed a wing defender. He fit the bill on all accounts.
For the start of the playoffs, at least, Pop wanted Temple active in case Hill's recently sprained ankle had continued to aggravate him. By the time Hairston was ready to go (whenever that was), the Spurs were on a roll and since that was the 11th or 12th spot, Pop presumably figured there was no sense in making a change. Also, Temple had played well down the stretch in the regular season. In terms of Summer League, why would they have said "he has a lot of fans", if they didn't mean it? The "knew what they had" comment, I took as a sign that he had a good chance to make the team.
They could have (and might have) told him he had a good chance to make the team and play at least semi-regularly, but I'm not sure that would have trumped having a guaranteed contract, making more money and playing consistently.
Gee would have been around either way, they'd at least want to get a look at him throughout training camp/preseason.
For a few games, with a joke team, in the midst of a lost season. Once upon a time, Jeremy Richardson started a game for the Spurs. It didn't mean anything, just like Gee starting for the Wizards didn't.
The fact of the matter is, at this point, he's a fringe player/prospect. An intriguing one, though.
He was under contract with the Spurs, so no other team could have signed him.