The Germany captain made his Red Devils' debut at the weekend with many Bayern fans upset to see the 31-year-old sold after he had spent his entire career in Munich.
Kahn sees the transfer differently, however, and can relate with Bayern for selling while they had the chance to do so because he was not likely to be a regular for them this season.
"A club cannot make allowances for what a player has achieved for them, but they are responsible for looking at what he is currently doing for them," Kahn told Kicker magazine
With Thiago Alcantara fit again, Xabi Alonso a regular, Philipp Lahm and David Alaba impressing in the same position, Joshua Kimmich signed from Stuttgart and Javi Martinez on the road to recovery, Schweinsteiger's opportunities might have been limited at Bayern this season, even more so now that Arturo Vidal has arrived.
"I certainly don't think Schweinsteiger would have been suited to being a back-up player," Kahn added.
"With that in mind, this decision is understandable."
Kahn, 46, believes Schweinsteiger's cult status among Bayern fans could easily have taken a turn for the worse after just a few poor performances, which is why he was right to move to Old Trafford.
He was given a warm welcome when introduced in the 1-0 win over Tottenham Hotspur on Saturday, but Kahn has warned his honeymoon period might not be long if he does not adapt to a different brand of football fast.
"Bayern's style of play was suited to him, but he's going to have to adapt to an extremely high tempo at Manchester United," said Kahn.
"He could run into problems relatively quickly if he does not get back to a top physical condition."
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Source: PA