The rule was changed in 1994 because of a cost cutting measure. The NCAA deemed it was a competitive advantage for larger programs because smaller ones couldn't afford to do so.
Something close to 60% of schools voted to overturn the rule but they needed a 2/3rds majority.
100% correct.
Harbaugh does tend to work in the gray areas. He is the ultra competitor and looks for every advantage, no matter how small or seemingly insignificant.
That being said, and this is pure speculation, I think this low level staffer took it upon himself to blow past the NCAA rule on scouting. Read his history. An ultimate Michigan fan and former Marine officer who takes intelligence gathering very seriously. This dude, while commissioned, would fly from Camp Pendleton to Ann Arbor on his own dime to to fill a voluntary (non-paid) position on the UM football staff. Regularly. Then left the military and was put on staff in a paid position. So, if you know anything about the military and intelligence gathering, you know that they will use absolutely every tool and technology available to complete their directives/missions....which is where the problem lies.
Harbaugh, as head football coach, is responsible for the actions of his staff. The NCAA is clear about this. And with the current Level II recruiting violation under consideration, this potential infraction would elevate things to a Level I. He may well not have known about the techniques being used (don't ask, don't tell), but he's on the hook for it.
It's situations like this that reinforce the thought that the true Power 5 conferences need to break away from the NCAA relative to football programs. The 40% who voted against advanced in-person scouting in 1994 were the ones who didn't have the budgets to support it. Technology has advanced to the point where in-helmet communication systems are tried, true and proven (see NFL). Installing and maintaining this technology is not cheap, but becoming necessary within ultra-competitive football (see NFL). The NCAA tries too hard to serve the have nots, and so the haves need to make a decision, create their own commission structure including rules, bylaws and financial penalties and move to operate independently from an onerous and overly bureaucratic organization that is the NCAA.
Teams go to extraordinarily goofy lengths to hide their signaling. It's just silly. All because of the have nots. Let's end it and let the big boys play big boy football with all of the benefits that situation affords.
I'm an Iowa guy, but just see this situation as nonsensical and a signal to move on.
JMO