In addition to the impact of having two teams in the BCS, I'd also say the precipitous decline of a usually strong program really hurts the conference. If UM was their "usual" self (9-3, 10-2) instead of the awful team they were this season, teams like MSU and NW would have been just as mediocre, but would have been knocked down a tier in the bowl system. The almost instantaneous collapse hasn't given the other B10 teams time to fill in the gap, so we end up with mediocre teams finishing in the top 3 or 4 of the conference and playing in bowl games they have no business playing in.
Playing the always fun hypothetical game, let's assume for one moment that UM didn't suck this season. Strike that, they always suck.
Let's assume they sucked in their usual sucky way instead of this new-fangled spread suck system.
ACTUAL STANDINGS (PRE_BOWL):
Penn State 7-1 (11-1) - Rose Bowl
Ohio State 7-1 (10-2) - Fiesta Bowl
Michigan State 6-2 (9-3) - Capital One Bowl
Iowa 5-3 (8-4) - Outback Bowl
Northwestern 5-3 (9-3) - Alamo Bowl
Wisconsin 3-5 (7-5) - The WhoCares.com Bowl
Minnesota 3-5 (7-5) - The NoSeriously...WhoGivesAShit.com? Bowl
Illinois 3-5 (5-7)
Purdue 2-6 (4-8)
Michigan 2-6 (3-9)
Indiana 1-7 (3-9)
Michigan, as a less-sucky team, beats Utah, Notre Dame, and Toledo OOC. In conference, they still lose to OSU and Penn State. Knowing their issues with mobile QB's, let's say they lose to Illinois, too. But they would usually beat Michigan State, Purdue, and Northwestern. Re-calculating the standings, we get this:
HYPOTHETICAL STANDINGS (PRE_BOWL):
Penn State 7-1 (11-1) - Rose Bowl vs. USC
Ohio State 7-1 (10-2) - Fiesta Bowl vs. UT
Michigan 5-3 (9-3) - Capital One vs. UGA
Michigan State 5-3 (8-4) - Outback vs. USC
Iowa 5-3 (8-4) - Alamo vs. Missouri
Northwestern 4-4 (8-4) - Champs Sports vs. FSU
Wisconsin 3-5 (7-5) - Insight vs. Kansas
Minnesota 3-5 (7-5) - Motor City Bowl vs. MAC
Illinois 3-5 (5-7)
Purdue 1-7 (3-9)
Indiana 1-7 (3-9)
Even with two BCS bids, the B10 would have MUCH better match-ups than they did this season.
Hell, if you add back a good UM team and only give the B10 one BCS bowl, it's even better....
HYPOTHETICAL STANDINGS (PRE_BOWL):
Penn State 7-1 (11-1) - Rose Bowl vs. USC
Ohio State 7-1 (10-2) - Capital One vs. UGA
Michigan 5-3 (9-3) - Outback vs. USC
Michigan State 5-3 (8-4) - Alamo vs. Missouri
Iowa 5-3 (8-4) - ChampsSports vs. FSU
Northwestern 4-4 (8-4) - Insight vs. Kansas
Wisconsin 3-5 (7-5) - Motor City vs. MAC
Minnesota 3-5 (7-5) - CrappyBowls'R'Us.com Bowl
Illinois 3-5 (5-7)
Purdue 1-7 (3-9)
Indiana 1-7 (3-9)
Suddenly, the B10 has a lot of favorable match-ups. The bottom line in this hypothetical.....
The B10 sucked in bowls this year as a result of (in addition to it not being a particularly strong conference this year):
A. Ohio State getting a BCS bid because of it's success and passionate fan base
B. Michigan sucking big, floppy donkey dick
Now who can argue with that?