There are teams that we are always recruiting against for players.
We need to keep Iowa and Northwestern away from us. One way to do this is to make sure we beat them every year so it looks like we project higher than they do. It builds perception that we are in a higher tier than them. Iowa and Northwestern are must win games for us every year. Its way worse losing to them than say Wisconsin as they are perceived as a better program right now nationally.
If we start beating them consistantly then we move up a tier and it turns into Wisconsin being a must win game etc.
The tier thing that you talk about is very big IMO. It used to be the Big 2 and Little 8. Then the B1G expanded, Wisconsin became a power, and there ended up being 3 tiers. In just 2 years Purdue has moved from the bottom tier all the way up to possibly being near the top of the middle tier now.