Iowa still has a long way to go in terms of improving recruiting (if you are basing it off of stars which in reality usually proves to be accurate). With that said, this is the 2nd linebacker in this class who chose Iowa over Wisconsin. It's a small step forward but it is at least a step.
Also, I think it's important to remember Ferentz didn't resurrect Iowa football with four and five start recruits when he put together an undefeated Big Ten season in 2002. Yes, I think in all likelihood Ferentz has gotten too comfortable over the years with his system and recruiting. Yes, I do agree that Ferentz has not been living up to reasonable expectations, especially after signing the large contract. However, especially with the favorable schedule Iowa has this season, Ferentz is due for another surprise season. If he is willing to make adjustments and tailor his system to get the most out of the talent he has and to adapt to the modern style of play, a successful season may help improve the talent coming in and get the program moving steadily in the right direction.
However, I will say at this point in his coaching career there is serious doubt that he can or will. In other words, if Iowa has another mediocre season (6-6, 7-5, or whatever) then I think Ferentz should indeed humble himself and agree to step down. I have no idea of the logistics as far as contract buyout etc., but I will definitely be in agreement that he needs to go. My hope is this situation will be somewhat similar to Joe Paterno at Penn State (sans the child abuse scandal). Paterno seemed to have gotten comfortable and lax and strung together some mediocre seasons that got Penn State fans grumbling. He proved that he was able to adjust and got Penn State back to national relevance (until of course the child abuse scandal). I hope Ferentz can do the same at Iowa. However, if Ferentz doesn't get it done this year, then I'm in agreement it's definitely time to start looking for his replacement.