If you go to MGO Blow, a pervasive opinion from a large swelling of their posters is that "Michigan isn't willing to do whatever it takes to win, whereas OSU, Bama, etc) are. Others come right out and say they won't cheat like other schools.
An OSU fan logged on (one of their regulars) and said, "you think Gary came there because you guys have the best general studies program in the country?" Crickets (or at least that should have been the dominate sound). As pointed out above, UM has often out recruited Clemson, and has had more than a few seasons where there were within a few spots of OSU in recruiting rankings.
Michigan fails because their hires have been suspect, player development has been suspect, and the school has no identity. Their savior still believes in wearing all white unis, and until this year, thought he could win with man ball and 21 points. He is the perfect coach for them, a throw back philosophically to the "good ol' days" and the proverbial "Michigan man." What you saw this year was again more instability, having to bring in a coach to work with a RPO QB whose best skill set wasn't handing the ball off to the fullback. In a few words, no identity.
Their fans don't get it, just like their administration doesn't get it. No one cares about your pre-WW2 records or your sell out streak, or your winged helmets and goofy fight song-- kids today care about what Michigan has become, not what it was. Best part is, having hired the prodigal son, there is no easy out for the program, which means this isn't getting better any time soon.