Great coaches make great programs, not the other way around.
Nick Saban would've made USC, Nebraska, Notre Dame, Michigan- anywhere he went great. Alabama was wandering in the wilderness before he got there. LSU was a joke before he went there.
USC might have a self-inflated view of itself- but most blueblood/helmet programs do.
I also think the landscape has probably changed on them and they may never be able to recapture glory. LA is a megacity and USC football is an afterthought at best in LA. The campus is smack dab in the hood. Majority of LA doesn't give two shits about USC football. They have trouble selling out their stadium and getting tv ratings even when they're good. They bring in very little revenue compared to the other blue-bloods like OSU, ND, Bama, Texas, Michigan, etc.. Why is revenue important? Well, it's how you pay for top notch coaches & assistants and how you build up state of the art practice & player facilities in that neverending arms race.
The local recruiting talent base is incredible, but with the ease of travel with so many major airports in that area & cheap airfare to cities all over the country- staying home isn't really as important to most players anymore as it once was.
I feel like more and more players today want that kind of game-day atmosphere, college town feel that the other blue-bloods have that USC just doesn't have and never will have. And the facilities as well. Players want the facilities of Alabama, Oregon, OSU, etc.. Facilities that USC doesn't have and never will have.