Actually, the division is not really as bad as it seems, based on their records.
The Yankees are obviously better than they've played so far. The Yankees
Pythagorean W-L is 28-23, which suggests that they've ben a little unlucky, and their performance will even out over time.
The Blue Jays, when healthy, are a very good team. BJ Ryan is out for the year. Troy Glaus has missed about one-third of the team's games this year. Roy Halladay (arguably the second-best pitcher in the AL) just came off the DL, Reed Johnson (.390 OBP last season) has only played 7 games, starting catcher Gregg Zaun has missed half the season, and they've had a bunch of other unspectacular (but serviceable) players go down with injuries. Injuries have definitely taken their toll.
The Orioles are at .500 right now. They have some talent, but they need a few more pieces to really compete.
The Devil Rays have a fantastic offense, awful pitching. It's been that way for a few years.
So, the divison isnt as strong as the AL Central, but it's definitely better than you would guess just by looking at the standings