It seems that your separating teams by tiers without really taking into consideration who they've actually played and beaten, or lost to.
You seem very impressed with Mich St, but of their 7 wins, only 1-3 are what you'd call "good wins", vs OSU, @UW & @Iowa. But compared to Minnesota, our win vs MSU and our road win over Illinois is close to comparable to their 1-3 wins. The only difference would be their's and our games vs Wisconsin in Madison. We lost by 1, they won by 2.
We were riding low on a 3 game losing streak, they were riding high on a 5 game winning streak. Seems to me that the 3 point swing in our games vs UW in Madison is more than understandable.
It shouldn't be forgotten that we beat MSU. Granted, they'll probably even the score with a whole week to prepare for us.
But MSU hasn't played hardly anyone yet, hell, 5 of their next 7 games are vs the other 4 Top 5 teams in the Big Ten, if you include the Gophers as above Wisconsin. Including Wisconsin they have 6 of their next 8 games vs the other 5 of the Top 6 teams.
As for tiers, looking at the RPI we see this tier structure,
Tier 1
7 - Mich
15 - Ind both of these are before IU beat Michigan, so IU's should improve & Michigan's will come down a bit
Looking at other ratings, BPI, Sagarin, Ken-Pom, etc. has both of those two ranked consistently in the Top 5.
Tier 2
10 - Minn
22 - OSU
Those other ratings have both those teams ranked consistently between #8 and #13
Tier 3
13 - MSU
MSU in the other polls ranks between #11 and #20.
I see MSU being brought down to reality in the next month or so playing a much tougher schedule from here on out.
Tier 4
51 - Wisc
The other ratings have Wisc rated from #15 to #31. I believe that their RPI rating will keep improving as time goes by.
Tier 5
33 - Ill
94 - Iowa
The other rating's have both of these teams rated between #34 and #66. While I see Iowa's RPI improving as time goes by, the Illini's will get worse, closing the gap between these two. But let's hope that Iowa upsetting the Gophers is not one of the things bringing this about.
Tier 6
84 - NW
109 - Purd
The other ratings have these teams rated from #55 to #100.
Tier 7
81 - Neb
The other ratings have this team rated from #105 to #154.
Tier 9
184 - PSU
The other ratings have PSU rated from #171 to #201.
And yes, I skipped from Tier 7 to Tier 9 on purpose, lol. PSU is just embarrassingly bad.
Not a huge difference, just have Minnesota higher and MSU lower. Both have yet to prove that they are as good as people think MSU is and that Minny is as bad as some think we are.