First - the MOST important factor in all of this is that it is about perception. This guy was saying that it was the perception of the various coaches he spoke with that BYU was not necessarily viewed as a desirable job. Like I said - this was a while ago. Keep in mind - this guy wasn't JUST talking to LDS guys that he knew BYU might offer. He was talking to a number of coaches.
As a BYU fan, we tend to believe that BYU is a desirable job. According to this guy - coaching at a place like SDSU, USU, or places of that ilk were on the par with BYU when you considered the pro's and con's. And the coaches believed that it might be easier to have more success at those other schools - which could lead to a bigger job - than it would be to have success at BYU. Again - due to some of the barriers (small recruiting pool, higher expectations, etc.)
And again, as I said, I'm not sure that's entirely true. But that was the perception of the coaches he talked to.