It shouldn't be difficult to grasp that playing the same sport, at the same time of year, on consectutive days 95% of the time, as a team playing in either the most popular, or the 2nd most popular (english premier league) sports league in the world would affect your ability to win games.
In Iowa City, the overwhelming vast majority of the coverage is Hawkeyes. Columbus, Madison, Happy Valley, etc - it is the college sport that is king. People are not that smart. They will follow whatever you shove in front of them - not blindly, you have to win too - but they will pay attention.
Attention breeds passion. Passion breeds interest. Interest breeds better players. Better players breeds more wins.
Is it the #1 thing on my wish list for the Gophers? Absolutely not. There are several things that have hurt the Gophers more than being in a pro market. For example, like DP said earlier in this thread - the most important thing you can do is to hire the right coach. Hiring that magical coach could change everything.
However, you can not dispute there is an effect of being in a pro market, and the effect is negative.