I read the post "Sunk Costs" and disagreed with the following point on who is to blame for this past season:
"Lloyd Carr put all his eggs in Mallett's basket, leaving Michigan with David Cone as upperclass QBs this year. His recruiting was obviously rotting slowly, too."
Unlike the Drew Henson situation, Lloyd Carr did not put all of his eggs in the Ryan Mallett basket. When Mallett signed in 2006, Jason Forcier was only a redshirt-sophomore and would've had 2 more years of eligibility left if he had stayed. Once Mallett arrived on campus, Forcier decided to bolt for Stanford, something Lloyd could not have planned for. This turned out to be unfortunate for both sides, as Forcier had to sit out last year (there would've been chances for him to play here) and then played hardly at all this season. He could've been a decent QB here and would surely have been a big step up from Threet or Sheridan this season.
Despite this, Lloyd still had a solid backup plan in place. He signed Steven Threet at the start of the 2007 season. Threet was meant to be a solid back-up to Mallett for 2-3 years that could develop into a potential starter by the time he reached his junior year. This can still happen obviously, he was just pushed into the starting role too early. Also important to keep in mind was that before Lloyd announced his retirement he had signed 4 star QB John Wienke from Illinois, a traditional drop-back player who ended up at Iowa after Carr announced his departure (I don't quite recall if it was before or after the Rodriguez hiring). If Wienke had stayed on he probably would've been better than Sheridan at least this year. Mallett bolted after the bowl game.
The QBs this year were clearly not ready, but Lloyd is not at fault. There was attrition out of his control. A running quarterback would have been great this season but that's not the system he ran and he probably never thought Michigan would hire a coach like Rich Rodriguez. This was just an unfortunate result of a drastic regime change.