I thought this was an interesting forum on mgoblog (which never disappoints in its terrible formatting). The poster was trying to get a legitimate polling of Michigan fans on what they think are realistic expectations.
There were some inane responses (the guy saying that they can only compete with Ohio State if they get some bag men - he was called out by others). But most of the thread was pretty interesting with realistic assessments - not the usual puffing out, but an honest take on what would be a reasonable level of success for the program.
The most common belief was that Michigan can and should be able to win the B1G at least every once 4-5 years, which means it would make the playoffs around that often. And it should be able to beat OSU at least 1/3 of the time. Which means Harbaugh is not meeting expectations given that they are not going to win the B1G again this season.
I think that is an accurate benchmark for the program up north. It should be able to win the B1G from time to time, it shouldn't lose all the time to us, and 10 win seasons by Jimbo may be an improvement but he falls short of what Michigan can and should be.