I think it's partly schematic. They have not figured out how to get the legit NFL athletes into position to make plays and that's 100% coaching. I think their defense is fine but their offense is a mess and looks easy to defend. They ask their guys to beat their man one on one and that's not really how most college offenses work today. That's more of a pro philosophy. You don't need to do that with Michigan talents though. That's the frustrating part. Ohio State changes their offense for their QB. Michigan doesn't.
But I also don't think they've developed players as well as other programs. Look at their NFL talent. Peppers and Charlton were busts and on new teams already. Getting guys to the league isn't to be discredited but their top recruits don't turn into elite NFL talent consistently. Bush, Winovich, and Gary may change that, as well some current players in college, but past returns haven't been great at the NFL level.
You haven't seen the kind of growth that you would expect from players starting multiple years.