They got a big lift from the whole conference being way down. Let's not forget they opened with losses to Ohio and Virginia. That being said, Bill O'Brien still did a heck of a job. I live a couple hours from State College and I also think under different circumstances you'd be hearing a lot more talk about how this season validated those who had been saying for years that Paterno's refusal to leave was holding the program back, especially on the offensive side of the football.
It's certainly not roses from here on out though - the scholarship limits get worse, current players can still transfer without penalty until the start of next preseason, and I while I expect he stays, I think the odds of O'Brien going back to the NFL are something > 0.