Because they had to pay nearly $7 million to buy out the current coach. In addition, we're in the middle of a pandemic, Utah athletic department is running at a revenue shortfall of $35 million, and the PAC 12 is hemorrhaging money with a very murky outlook on their own TV network.
Because he earned several pay raises over the course of his ten years at Utah. He started at $950k/year in 2011 and subsequently had 4 raises via extensions, including a massive boost after leading Utah to the Sweet 16 in 2015 (3 years removed from a 6-win season), and another raise after he won a game in the NCAA the next year. So, he didn't start at $3.6 million per year, he just ended there.
No way Craig Smith or any other coach starts at Utah north of $3 million this time around.