I think the expectation for any team in the top 20 would be to compete for the MNC. And there is a big difference between competing for a MNC and not competing.
9 wins per year = not competing for the MNC.
10/11 wins per year = competing for the MNC. The gap may not seem it, but it's huge. Even if you can win 9 games every year, you're not competing for the MNC. Even really winning 10 you don't compete for it, but you're on the bubble for competing. Look at almost every successful coach out there, once they start regularly winning 9/10 games they're on the verge of competing for the MNC. Hit a ceiling at 9 or under, you're out even if you're Bama or Texas or OU.
In Jimbo's case, he never even plateaued at 9 wins. Therein lies the problem. We can do 7/8 or less wins with almost any coach as could Bama or Texas. Hell, we could hire Les Miles and hit 9 wins.
The Boosters of Substance must have realized they took on a hell of a gamble locking in all that money, and I have to assume they knew full well they could have to pay up if he didn't perform. So even though it's unfathomable to us, I guess they have that kind of spare change.