People are not noticing the improvement in Michigan's offense and defense. Previously, the offense was embarrassingly bad. Now it is just bad. The defense may be average to above average at this time. They have a good number of talented players on defense. Everyone is taking it as a given that OSU will beat Michigan this year. I do think OSU will beat Michigan, but I don't think Michigan is as bad as Purdue, for instance, which was essentially a practice game for OSU.
Here is Urban Meyer praising Indiana's defense.