As far as JE's recruiting approach:
Those who think that young men are going to be convinced to make the biggest commitment of their lives by a simple appeal to state pride are radically oversimplifying everything, and really denigrating the intelligence and decency of these recruits.
What are you really saying about these young men if the choice you present them is: either accept the "noble sacrifice" of playing for a downtrodden in-state team, or be deemed a weak-minded coward by the fanbase?
Personally, I don't perceive it as a sacrifice, given the level of competition and the quality of coaching which will be available to them and the amount of individualized resources they would likely be given. But simply going by past history, it is reasonable to understand why skepticism exists about our rose-bowl aspirations.
My sense is that JE overplayed his hand a bit last spring. (thanks for that wonderful insight about the recruiting weekends, poster whose alias I can't remember) He desperately wanted recruits to share his vision of the future glory of the black and gold. When that didn't happen he got angry and his frustration came through in the form of this "challenge" as it has been termed.
Appeals to pride only work for certain types of personalities. Perhaps it was more effective 20 or 30 years ago. The fact is that most athletes are motivated by a holistic package of what they think is going to be best for them and those they care about--not what is best for others, much less the amorphous masses of the state. I am not calling them selfish. I am saying that everyone, by definition, is Self-interested.
JE seems like an emotionally intelligent coach, so I'm willing to bet he won't be trying "to challenge" in state recruits in this way again. After all, how much more exciting is it to say, "because we have struggled so much over the last 10 years, you have an opportunity now to contribute and shine for the mighty b&g in a way that might not be possible at other schools or at other times." That kind of challenge is much more exciting and doesn't rely on the dubious power of guilt.
There might even be a chance to pull out some of the in-state recruits this year, if he can assuage their concerns about him and the program.