Despite the productive regular season, the Knicks weaknesses were exposed in the playoffs. The Knicks finished last in the NBA in assists during the 2012-13 season and fell into the trap of letting their best offensive players try to carry the load by themselves. Carmelo and J.R. are phenomenal scorers, but you're not going to win a championship when passing the ball is a chore.
The Knicks had a need for a distributor, but at this point in the draft, it was unlikely that they would find a suitable option. But Hardaway does have a skill that New York has shown they like--shooting.
Hardaway can help space the floor and open things up for the Knicks ball dominant scorers. He also has athleticism and size that his father lacked, so he can be a transition threat and a potentially tough defender as well.
The Knicks certainly have talent so Hardaway won't need to contribute right away. Their defensive progression under Mike Woodson indicates that they can evolve into a more team-oriented and unselfish group and Hardaway should be able to fit in as a capable role player.