No one is happy with the state of the D. Okay. But this is not a recent phenomenon. Go back to the 2006 OSU game, that D gave up 503 yards and 42 points. The next game, USC played it conservative in the first half until they started throwing the ball at which point they completed @ 12 straight (not attempted, completed). The following fall brought us "The Horror" which yielded 34 points to a 1AA tam. And then came a lovely 39 point, 624 yard game to Oregon. Later that year Wisconsin topped it off with a 37 point, 477 yard performance. And that was all under Lloyd's watch (a Defense minded, conservative coach). We all know the early RichRod era results.
My point is, the D has been susceptible to passing AND running attacks since the end of the 2006 season. There are many reasons but one key one is: Michigan has traditionally had LB's that were geared to stop the run and hopefully not hurt you in passing situations. That doesn't cut it anymore. Obi Ezeh (bless his run stopping heart), even in his interviews speaks to the fact that he comes off the field in passing downs now. Jonas Mouton is the best coverage LB (remember he was a safety in high school). If you blitz Mouton, who do you have left in the LB group to play coverage (Ezeh, Roh, Leach, Demens, Fitzgerald). All of them are run stopping LB's.
It's easy to argue a 4-2 would be better, but that would assume you have 5 DB's who would count as your best 11 players. Maybe next year or the year after.
Sadly, I think this adds up to the coaches are doing the best with what they have. If you want to blame the coaches for lack of recruiting, fine, but start where it all began, 2003, 2004, 2005, 2006, 2007, 2008, 2009.
Hopefully, Jack Ryan, Isiah Bell, Mike Jones, and others start the trend LB's who can stop the run and cover people. Until then, enjoy the offense.