I doubt they have much faith in him taking them anywhere, but they probably don't want to fire him in a flux year and bring in some unproven turd who will set the early path of the LA incarnation of the franchise toward failure. I don't know if they're a smart team, but if they're waiting for an established HC candidate who wants to line in LA break loose, it's probably a marginally smart move. Jeff Fisher. He's like Rasputin without the beard and funny hat.
I guess that's as rational as it can get for why they're keeping him. I'd imagine he'd get fired in a heart beat this offseason if they can get a McCarthy, Tomlin, hell even Coughlin or if Cowher/Gruden get the coaching bug again. Gruden would fucking love Hollywooood, and his chance at developing a young quarterback.
Rams COO (aka son of Fisher's agent) sugar coats the nepotism involved in Fisher's extension as "organizational failure" lol..... http://www.dailynews.com/20161212/rams-firing-of-jeff-fisher-represents-an-organizational-failure