I think something else needs to be considered when looking at a prospective record for IU. It is that of royalties from hats, t-shirts, etc. I believe that royalties are about 6% of retail pricing on items.
Teams that are highly ranked and seen on prime-time tv a lot sell more branded merchandise. I have lived in the Chicago and NYC metro areas a well as Indiana. You will see lots of Duke and UNC gear in stores there not because there are many local alums but rather because people like to associate themselves with winning teams.
Stores want to sell what others want to buy. Purdue wants to sell more t-shirts, etc so it gets more royalty dollars. Remember, IU is more of a media favorite than Purdue is all else equal, a lot due to IU's greater presence in media because of the J-School. So for Purdue to get more media presence they have to be consistently better than IU in their revenue sports records. That then translates into more fans, t-shirts, etc. with the accompanying larger revenue.
Being a lot better than IU is a great advantage in recruiting as well as in economics. Purdue wants IU to have bad seasons. That's another excuse for the "IU Sucks!" chant.