The U has a real soft spot for anyone connected to the glory years, like Red. I dont think anyone there would fire him for that reason. I sort of understand that, a little small bit, but its time to move on and begin a new story.
I suspect in three years Red will retire, so they gave it to him and let him go out on his terms. Hopefully the young assistant coaches can carry the water and breath some life into things over the next few years. They are surely a bright spot in the situation.