Joseph Eggleston Johnston had not fully recovered from his wounding at Seven Pines when he declared himself fit to serve again. Johnston was a workaholic and never content in idleness at the best of times, but he had been forced to sit impotent and invalid in Richmond as the war was fought in his abscence and could stand the inaction no longer - and, it must be said, professional jealousy of Lee of somewhat of the motivating factor.
He wanted to get back in the field and command an army, but he was well aware that there was no way he could return to command in Virginia - however much he longed to. He might have hoped for command of the Army of Tennessee or the Army of Mississippi but instead he got command of the Department of the West - a large theater with scant rescources unable to exploit interior lines against their more numerous and better supplied foe (due, in part, to the poor quality of Southern Railroads).
This was not a happy assignment for him. Everything he had done in military career to that point had geared him towards field command, and, while he was competent enough a staff office to handle the more mundane aspect of office work, he much prefered to be in the field surrounded by soldiers than in an office surrounded by paper.
Being Commander of the Department of the West nominally made him the direct superior of Braxton Bragg and his Army of Tennessee and of John Pemberton and his Army of Mississippi, and it may have been Davis's intention that Johnston could take control of either at his discretion, but such an arrangement did not sit well with Johnston's sense of military etiquette - if he were to swoop in and take charge of either Army he would be completely undermining the authority of the Army Commanders and making it impossible for them to do their jobs in his absence - and his personal sense of honour meant that he could never undertake the role in the manner Davis intended
Furthermore, the practice of Officers in the West recieving orders directly from Richmond and the President continued after the Department Commander's Office had been activated, without even consulting or notifying Chattanooga first, which in practice meant that the authority of the Department Commander was never truly established along with his office. This resulting in Johston as the Department Commander spending most of his time doing Quartermasterly work.
Johnston had wanted to rearrange his new command. He felt that it was impractical for Bragg and Pemberton to be expected to come to each other's aide due to the sheer size of the theater and that troops travelling between Mississippi and Tennessee would either be in transit or arrive too late in a moment of crisis to be of any help. He wanted to arrange it into two different commands - one in the Mississippi Valley where a Commander could be appointed to control Confederate forces on both sides of the river, and the other being Tennessee/Alabama/Georgia aimed at supporting the AoT - but he never managed to convince Davis of the merits of it.
All in all, it was not a good use of Johnston's talents to put him in an office role largely removed from front-line service - he was unhappy in the role, and he felt he had been put in a very professionally awkward position where he had no real authority, and couldn't really do anything as Davis retained the real power in the West and wouldn't let Johnston make changes - and it would have been a better of use of him to return him to the field in command of an Army, a role to which he was better suited than that of a desk jockey.
Also, if Davis had not been prepared to relinquish the power and authority over the Western Theater to a Department Commander - as his issuing of orders without consent or notification would indicate - then he should not have created the Department Commander's Office to begin with.
So, in summary, it was a bad decision and one which was executed poorly.