And apparently covered up by the head coach, the AD, a VP and likely the president. If that's not loss of institutional control I'm not sure what is. As we learned in Watergate, the coverup is often worse than the crime itself, and in this case the crime was about as bad as it gets. As the article pointed out, action in 2001, when they apparently knew about an earlier "first offense," would probably have ended JoePa's career earlier but would have shown institutional control. A decade-long coverup involving high-ranking members of the university administration can't be swept under the rug at this stage of the game. Severe penalties will have to be handed down or this will leave a stench that the NCAA may never recover from. You just can't compartmentalize this to extricate the football program and the overall institution from these offenses of an admittedly rouge assistant coach, who was a former assistant coach during some of the time period in which the offenses took place.
You raise some really good points, and these events clearly involved many people important people that SHOULD of done the right thing but did not. But as far as I see it, while this is a lack of institutional control, this does not involve student athletes, at least not in a direct competitiveness sort of way, which is what the NCAA is concerned about.
SMU's boosters were handing out paychecks to the student athletes, encouraging top athletes to come to SMU and get paid, a clear competitive advantage. Jim Tressel was made aware that his athletes were trading memorabilia for tattoos and other gifts, and he knew that he was letting ineligible players play, but he "ignored" it, creating a competitive advantage.
But the Penn State scandal did not create a competitive advantage at all. I think having Sandusky being convicted 45 of 47 charges, totaling up to over 400 YEARS in prison is a clear enough message that
Penn State took control of this situation once it was raised to the public's eye. As far as a lack of institutional control, this involved ONLY staff members, not student athletes. I just don't see how the NCAA could justify giving the death penalty for that very reason.