I think sustained success for a school should be enough to modify its baseline prestige. Look at a school like Gonzaga and how they've transformed their image. If some school like IUPUI makes 10 straight NTs and reaches a few Final Fours, in real life they'd be considered a new powerhouse and kids will have spent their middle and high school years watching the team dominate, so they'd be a lot more receptive to the school down the road. Similarly, if you've got a powerhouse and that powerhouse spends 10 years being a mediocre team, pretty soon none of your recruits will ever remember the team when it was good (see the current state of Notre Dame football, a behemoth once thought to forever be THE destination for big recruits no matter what their record).
So if they really wanted to make the game more like real life, they'd make baseline prestige maleable. I'm not saying change it at the drop of a hat (I don't think high school All-Americans are lining up to play at Northern Iowa right now) but if a team earns it, they should get it.