Source - Wrestling Observer Newsletter
Vince made the decision last week to pull Rey Mysterio from his title match against Edge at the Great American Bash. Mysterio gave the indication that he wouldn't be ready by then and he is trying to push his return to August. However; he is currently under a lot of pressure by McMahon because SmackDown's roster is so thin.
Vince went ahead and replaced him with Kane as he feels fans would love to see him chase Edge for the World Title. The feud will probably continue for a few months.
It should be noted WWE expected Mysterio to be ready by the pay-per-view, as he is featured on the promotional poster.