Yeah it sounds like Harbaugh thought he had it in the bag and the Wednesday interview was just a formality. Who knows how much of the smoke was coming from his camp and how much was coming from the Vikings. Certainly there was interest on both sides, but it appears one side was more into it than the other
I was told by a friend of mine that has connections to Harbaugh through family that Harbaugh was told by someone in the organization that the in-person meeting on Wednesday was just a formality. Things were going good until the afternoon when the Wilfs let him know that they still had another person they wanted to talk to. That's when Harbaugh decided to take his name out of the running.
My buddy had sent me a text on Sunday night that it was 99% that Harbaugh was going to the Vikings. So I think Harbaugh thought the Vikings wanted him and it was up to him to decide if he wanted the job.
Basically, Harbaugh thought the job was his when he went there on Wednesday but the Wilfs had other ideas and treated it like any other interview and that killed it for Harbaugh.
I do think it's odd that almost immediately after word came out that Harbaugh said he was staying at Michigan that news broke that O'Connell was going to be the choice.
That tells the Wilfs had decided on O'Connell before the Harbaugh interview and were maybe just seeing if Harbaugh blew their doors off.