Source: The Wrestling Observer Newsletter (F4WOnline.com)
While not a whole lot still remains known regarding WWE cutting Nick "Eugene" Dinsmore on Friday, it isn't believed to be over a drug test failure as the company didn't indicate anything of the sort when announcing he was cut. According to various WWE sources, the feeling is that since he showed up to last Monday's Raw taping in Calgary looking very out of shape that a decision was made (most likely by Vince McMahon) to get rid of him right away. He had just been hired back about a month ago.
While this might sound surprising to some, Vince is pretty big on first impressions. For instance, his first impression of Takeshi Morishima following a tryout match a year ago this week killed any possible interest in signing him. An issue of Power Slam noted the following: "August 19: Still on the warpath, Vince claims two more victims: he basically says Morishima looks like a giant, fat girl and that Laurinaitis was wasting his time by hyping such a s colourless and podgy wrestler. Vince also sagely notes that because fellow Japanese name Kenzo Suzuki tanked in WWE, obviously Morishima was likely to be a failure as well — solely on the basis of their shared ethnicity."
Reportedly, the WWE creative team wanted to get Eugene on television very quickly, so the fact that he was released after his first appearance adds further credence to the theory given.