I don't agree that they've regressed. They started out subpar and have remained subpar throughout the season. With the exception of their win over an overrated Michigan team even the biggest hawk homer couldn't argue that any of their other wins are remotely impressive.
I agree with this. Iowa played the bottom of the barrel of the BCS with a schedule of (current BCS rank):
Indiana (112), Minnesota (89), Northwestern (63), Pitt (65), Purdue (66), Louisiana Monroe (104), Tennessee Tech (FCS).
It wasn't really a murderers row with 7 of the 12 teams being below Iowa (48). You stick Iowa in a conference like the B12 where the average BCS standing is 26.5 - there is no way they are bowling this year.