Clearly, only he can know whether he's afraid or not - but it seems odd that a legend of the sport should be comfortable disappointing the fans. I've never spoken to anyone who knows anything about MMA who doesn't want to see him in the UFC, whether to stay or not.
Whether you are a Fedor fan or not, whether you believe that Strikeforce and other formats represent genuine competition for the UFC or not, it doesn't matter. All the questions would be answered if he appeared in the UFC. If the issue is preference for other formats/organisations, he could always go back afterwards. If he was successful in the UFC, he could even trade on that to massively boost the credibility of these other organisations.
I think that one thing to note about the (very good) point by warchild75 that he has defeated ex-UFC champions is that there is a HUGE difference between fighting a reigning champion and fighting a former champion, in ANY combat sport. The ranks of MMA, boxing etc have always been filled with athletes who have defeated former champions, but will never hold a title themselves, for many reasons.
Would Couture or any other great champion who lives for the competition pass up the opportunity to prove himself in this way? I think the answer is clearly no, which makes the Fedor situation puzzling.