For a number of reasons....
A) Mack is young by college coaching standards and presumably in good health. I think he is 57. He could coach for another 7-10 years easy. Why would you do this if you are Texas. I understand you want to lock in a potentially great young coach and it may be that he meshes really well with the UT higher-ups, but a lot can happen in 7-10 years, i.e., Major Applewhite could go coach at, I dunno, Mississippi State for 7 years - turn them into a annual SECCG contender and be lauded as the hottest young wizard/MIRACLE WORKER of a coach in the nation (emphasized because that is what everyone would think if he won at State, right?). Naturally, being a Texas alum, he would jump at UT after Brown retires. Yet they are going to go ahead and name Muschamp and give him 900k a year to be the coach-in-waiting? That is puzzling.
B) Why would you do this if you are Muschamp, other than the obvious hike in pay? I wonder if there is some clause in his contract that forfeits a portion of his 500k raise if he chooses to take another job. What if LSU or UGA decide in 4-5 years that they are tired of the way things are going and want to hire a young coach with SEC ties? Of course he wouldn't want to stay at Texas as a coordinator with schools like that calling.