If my new coach was Mullen, I'd probably say "meh, could have done better".
It wouldn't be a terrible hire, but with PSU's history, tradition, facilities, and cash, Dan Mullen has to down the list a ways. They can get somebody much more proven and a coach that has championships as a HC.
Plus, I think people are over-hyping the PSU connection. Being a fan growing up does not automatically get you brownie points in the coaching search. He's not a former assistant or player. Sure, his past likely would draw him to wanting the job more, but it certainly doesn't make him any more likely of a candidate than any other qualified coach.