They talk about it being an "outside university", but it sounds like the university has nothing to do with it. A better interpretation is "best college towns for outdoor activities". It has nothing to do with the UI itself (though you could argue the university contributes to the intellectual atmosphere of the city). It talks about recreational things offered by Iowa City, Coralville and surrounding communities and Johnson County. Honestly, I would agree with that. I love Iowa City for some of those same reasons. Lake MacBride/Coralville Lake, the bike trails, and the Jazz Fest are three of my favorite things to do during the summer.
I think this is a perfectly valid award for Iowa City, but don't let Hawk fans trash-talk you with it: this award has nothing whatsoever to do with the caliber of the university (though I'm sure all are fine schools). (See below.)
1- UCSC, Santa Cruz, CA
2- Colorado, Boulder, CO
3- Middlebury College, Middlebury, VA
4- Warren Wilson College, Asheville, NC
5- Montana State, Bozeman, MT
6- Simon Fraser, Burnaby, BC
7- Dartmouth College, Hanover, NH
8- Virginia, Charlottesville, VA
9- Northern Arizona, Flagstaff, AZ
10- Iowa, Iowa City, IA
Also of note-
18- Wisconsin, Madison, WI
19- Hawai'i, Hilo, HI
36- Minnesota, Duluth (not Twin Cities), MN