I do think Tebow will get better as a passer - how much better? Who knows.
That being said, don't underestimate the power of the fans. I'm sure some would say it's stupid to let fans determine on-field decisions, but keep in mind that football is also a business. Obviously if a guy sucks, you don't keep running him out there. But if Tebow can even be an average NFL QB, and they can build a strong team around him, he sells jerseys, puts ***** in the seats and gives players and fans a jolt of energy/hope.
I have no clue if Elway is putting on an act as far as his feelings about Tebow, but as a businessman, he's been a pretty smart and successful guy, post-football. Tebow will definitely be the starter next season, and I suspect if they finish above .500 again, he'll be sticking around a while.
That being said, if they finish first, they're gonna draw all the first place teams in the AFC next year, so that will present a much more formidable schedule. On the plus side, they'll also get the NFC South, so Tebow will have a chance to bitchslap Newton back to the stoneage.