From what I've read, Krause is AD in name only. Jim Epps is really running the show, he'll just need Krause's signature for a few big things. My take on this, is that Wefald rewarded Krause with the AD title for his years of service to K-State.
Now, this isn't necessarily a bad thing. As long as Krause and Epps see eye-to-eye on most things and have an understanding about where K-State athletics is headed or needs to be heading, then this can work. If not, or if these two start butting heads and disagreeing on the direction of the department, things will fall apart fast. Or, in the next year or two, when it's time to hire a new coach for either football or basketball or both, if they are not on the same page, things could get ugly.
In the short term, this move has a "final act" feeling to it. In five years, Krause (20+ years), Epps (30+ years) and Wefald (20+ years) could all decide to retire, then the University starts fresh, from the top down (this will be the most dangerous time for K-State, depending on who is hired).