I still somewhat look down at the NIT. Okay, I'm not nearly as degrading over it as you are demonstrating, but it does completely pale in terms of the NCAA Tournament, and that fact doesn't change. However, I am not opposed because watching more ISU basketball is always fun. That being said, I hardly think that "making the NIT Final Four" or "qualifying for the CBI" are hardly bragging points.
I don't think it's an embarrassment, but I don't think it making the NIT should be an "end goal" of a season, nor do I think qualifying for it should signal a successful season (even if your program has been down on its luck for a few years). Nor do I think no self-respecting program should ever accept a bid - if the NIT is good enough for Syracuse and North Carolina, and the CBI is good enough for Washington and Virginia, Iowa State isn't "too good" for either tournament as well.
As far as the "NIT should just go away," the NCAA certifies new bowl games nearly every year. If it's okay to have completely meaningless bowl games, then I see no problem with having completely worthless basketball tournaments either.