But trying to fairly answer your questions, best I can...
I would have hired Rich. I would have handled everything after it differently, and before as well, if I was Martin. I wouldn't be on boats, and I wouldn't be in a panic, and making a hire after an interview in an airport, but after long discussions. These discussions would have involved having him meeting with Lloyd, and having him on the same page, rather than dismissing him. It would have been finding out (and maybe going another way) if Rich was willing to retain some of the previous staff. Sure, offensively it's a different system, so he needs his own guys, but defensively he had no plan, so there's no harm in having guys who can help him adjust to the Big Ten. Ron English wasn't a possibility, because you can't have a guy who applied for your job on your staff, but if handled early enough, he might have been retained. But guys like Bedford and others, not even replacing Rich's guys, but taking the open spots that he went outside the WV staff to get anyway. And find some ex-Michigan guy (probably not Mattison, but there are other candidates) for the DC job. Or make someone like Bedford DC and find another ex-Michigan guy to plug into whatever the Rich guys didn't have covered. Yeah, you'd like to let him just put in his own staff, but obviously he wasn't the best judge of defensive coach talent, so you might as well had smoothed things over with old school guys like Carr, and in turn made Rich seem like less of an outsider. And certainly would have helped recruiting locally, which is not only political, but might have helped the overall talent level by getting a few more talented players who were easier to pick locally. Or at least keep those doors open...or prevent them from being hostile, in any regard.
Having not read it, I can't say Bacon was dishonest...and my impression is he's not. I wouldn't even say he's "shading" it. For sure not intentionally. I think he's presenting a one sided story, because that's who's he's made a connection with, contactwise and emotionally. The fact that the defense (even brought back up in this post) gets only mild attention seems like a huge omission. Sure, Casteel might have made things easier, but LOTS of coaches (including our current one) can't bring whole staffs with them, and there isn't the political backbiting and cohension disaster there was with Rich's defensive staff. How a book that can (supposedly) concentrate on all the politics, and brush over the internal staff politics, which most likely had a lot more on field effect seems odd.
I really doubt everything Lloyd did was defensible, either on field or off. Lloyd is a guy who holds a grudge. Look how he got the job; check out the press conference where he gets it, and how he feels about the guys he thinks screwed over his friend, Gary. I think the whole Bump story is a false parallel...because while Bo after the fact told how he had to whip the team into shape, at the time he wasn't going out (in a different, non-instant 24/7 media environment) blaming Bump for all his woes, and discrediting the staff and the program. He may have thought the football needed an overhaul, but he valued Michigan. I doubt he ever said things "not after I got here...or what I had to work with"; he talked about how "that was the nail YOST used!", propping up the deficiencies. Bump for that was certainly grateful, and returned the favor. It's a two way street. Bo saw as an outsider you can go in and change things, but you don't devalue where you're at. That's in the book Bacon wrote.
And I think a lot of it comes from the people around them both. The part shown from the 3-way meeting has Lloyd saying stop having your people talk about me, and Rich basically saying it's beyond his control...and I'm sure Lloyd doing the same. People who liked either guy, and were on either guy's "side" were saying bad things about them, and less Rich and Lloyd themselves (though I'm sure it went on, to some extent), and because they weren't on the same page to begin with, they didn't actively try and stop their camps. Because one thing I'm amazed at is that it seems even though Bacon heard all this stuff about Rich, he never heard Rich or Rich's guys disparage Lloyd or the players behind closed doors...because he'd have been the only guy behind the scenes NOT to hear of that stuff.
If they're on the same page, maybe a lot of the problems don't happen, and Lloyd acts a little more out of character and comes out and says more. The whole "never said anything" is a myth. There's video of him supporting the program; there's the in game interview with Brandstatter. Frankly, he talked as much about the program going in the right direction then as he has now, with Hoke, one of his guys, in charge. Which is not much.
And the last thing I'd do is realize how Michigan works...lose, and you're going to get burned. I'd have let Rich know he'd have time to build a world beater, but the goal was to win to the best of your abilities every year, and not act like you're building a team that won 5 games over the last 3 years. It's about the players, and the seniors. Do what you can to maximize their experience. Do what you said you would when you say "I like winning too much not to adapt" and "a WV fan said you better not go 3-9 at Michigan like you did at WV. Uh huh". Don't worry about the next big guy, work on keeping your current players, and let the existing players know you're going to do everything possible to have them go out the best they can as seniors. Because it's really about them (and for you, you won't have the weaker of them turning on you). And for the fans, try try try to get to that 6th win...because man, if bowls streaks start going down, we're in trouble. And you'll have time to slowly integrate your system. And I'll try not to do stupid stuff to get pushed out of the department so I'm around to make sure you have that time.
So, I think there are people involved. Damned people. Martin, who knew how to make money, but was far from a people person. Lloyd, who takes offense and holds grudges. Rich, who came in cocky and arrogant, and wasn't afraid to say so. And people around playing game, that made for a toxic situation. But I still think in almost any situation, a lot of that gets smoothed over by winning. People learn and accept...cocky seems justified...and people are too happy over the last win to care about the other stuff. And while things can certainly be made harder, I still think coaching and players have a lot more to do with winning and losing football games. And bad decisions there (mostly on defense, but some recruiting errors) caused the horrid record far more than he said-she said, and that's why Rich isn't coach here anymore.
And it has little to do with "I told you so's" about Hoke. I like the guy a lot. I think he's a good coach. I'm impressed with his recruiting and the staff he hired (best coordinators as a group I think we've had since at least Moeller and McCartney). And I feel confident he'll carry on the Michigan thing of doing it the right way. Now he has to win (which I'm pretty sure Harbaugh or Miles would do, but not so sure about the other stuff). And if he doesn't, he's not going to last more than 3 years either. MSU next year is a HUGE game for him, because that one at home, with all the motivation from this year...not sure you come back from 0-2 vs. State...unless you're beating OSU every year. And it has little to do with he's "better" than Rich (or not). Just that a change was needed, and I like who we got from it. I wanted to see Rich have a shot. I wasn't sure it would work after the end of last season. And after the bowl, I had my doubts he could make it work. Because the recruiting was going to fall apart, it'd be a full year of REALLY hot seat, and it wasn't fair to him or his family either, because that scrutiny would be hell. And if HE had lost to MSU last weekend (as we probably would have)? It was best for everyone to get out of it. But it's not something to be proud or happy about. It's a sad day any time Michigan has to fire a coach, and not have them just retire. But for the future of the program, to not struggle in recruiting and have a dip turn into a down period, it probably had to be done. I take 0 glee in it, and wish Rich well. Like the guy. But I don't see him as mistake free either, (and even the biggest Rich backers say it presents him in a REALLY good light), and while the mass media likes to paint him as the only bad guy, the side media seems to do the opposite...he was blameless and a victim. And I don't really see anyone ever presenting the nuances and the gray areas, the middle ground. But that's pretty much true about everything, not just Michigan Football.
Hope that answers your questions.