I would LOVE Hoiberg, but it's not happening for the reasons outlined by herkyhawkeye. I could see Fred leaving ISU, but only for the NBA (not any other college job) and only for a contract that provides immense security (he's not going to Charlotte or Phoenix on a 3 year deal for example).
However, the people saying Iowa State is a better job, or even a similar job to Minnesota are flat out wrong.
1. Iowa State never, and I mean NEVER gets the best players from within Iowa- If a player in Iowa is worthy of playing high major ball, he usually goes out of state (Collison, Hinrich, more recently Paige and Barnes) and if he does stay home he attends Iowa (Dean Oliver, Greg Brunner, Adam Woodbury). I am sure I am missing a player or two, but the last in state star to choose the Cyclones over national programs was Fred Hoiberg himself.
2. The local talent base is better in Minnesota- Even if ISU could change the trend of where kids from Iowa play their college ball, the state still doesn't produce the type of talent Minnesota does.
3. Exposure- If you have DirecTv in Iowa, you don't even see the Cyclones play unless they have a game on ESPN 1/2/U
4. Compensation- ISU has never demonstrated the ability to pay a coach what Minnesota has been able to pay
Iowa State has had some success, but also a lot of lean years (from '02-'11 they finished over .500 in league play once and 6 games (or worse) below .500 6 times). That's in the Big 12, not the Big Ten. When ISU has success, it's usually due to JUCO's and transfers which is exactly what Fred Hoiberg has done since taking over the program. You could certainly look at it as an advantage that you are allowed to do this at ISU, but you could also look at that as a disadvantage. Greg McDermott left ISU for Creighton, Dan Monson stayed at Minnesota when offered the Washington job.
The facilities at ISU are better and it's easier to win at a certain level in the Big 12 (especially with Missouri gone), but all the factors are clearly in Minnesota's favor.