They aren't delusional, it's pretty obvious Chizik's not the man for the job....
....but the reason you have to keep him is just fairness, and respect to a guy who won you a National Championship. No decent coach wants to take a job where they fire you two years removed from the school's first title in 51 years. But I think we all know Chizik won't get the job done next year and will likely be fired, but they know they have to keep him one more year, short of pulling another JUCO recruiting miracle out of the hat. We all want them to keep him, that tells you all you need to know.
In short, they aren't delusional about Chizik's coaching ability, but they are delusional about what has to be done for their program to succeed long term.