He could do a lot of damage to his reputation if he fails in college. You can fail in the NFL and still write your own check as a college coach. However, you can't fail in college and expect to have a job waiting for you in the NFL. I can't think of any coach that failed in college and immediately transitioned to the NFL.
It's not easy to win in Michigan and it hasn't been for a while. Who was the last coach to not get run out of town in Ann Arbor? Schembechler? Harbaugh is taking a big chance if he goes there.
Harbaugh can get paid more in the NFL, he doesn't have to grovel with 17 year olds, and he doesn't take near the risk. He would be crazy to go to Michigan.