Leeds came close to signing James from Swansea City in the 2019 January transfer window, but the deal collapsed and Manchester United secured his services in the following summer.
However, Leeds boss Marcelo Bielsa finally got his man on deadline day of the recent summer window and he joined the Whites for an initial £25m, with the final fee potentially rising up to £30m.
James has so far struggled to make a big impact in Yorkshire and former Leeds star Walton believes the money used to sign him should have been spent on other areas.
He also insists that James is not for him a £25m player, while his arrival did not strengthen the Whites.
“I think there is a reason Man United sold him to us after signing him only two years earlier”, Walton said after Leeds lost to Southampton on BBC Radio Leeds.
“He’s left a top Premier League team where, fair play to him, he did play a few Premier League games, but there is a reason why, when just before the transfer window closes, he gets sold to a rival, not in terms of league position, but in terms of the clubs.
“I just don’t see the £25m player, I really don’t. I would have said that before [the move].
“He was not the player we needed. We got rid of [Helder] Costa and replaced him with Dan James, so that’s just a replacement, it’s not strengthening.
“He was a player that I don’t think we needed. We spent £25m and it might have looked good and got the fans excited, but I said at the time we don’t need him.
“The £25m would have been a whole lot better spent on two areas, buy an £8m midfielder that’s Kalvin’s back-up, or two midfielders even, because the word is power and we lack any power in midfield when Kalvin is not playing.”
Leeds have had an unimpressive start to the new Premier League season and following eight games played sit just one place outside the drop zone.
