"we'll become the princeton of the west...a really smart, white school with great bball and that's about it. then BYU-Provo will become about as boring as BYU-I, they will lose interest of many LDS across the country, they will lose the ability to attract many students and, maybe most importantly to maintain ties with alumni."

This is why BYU has to maintain/achieve top tier athletics. BYU's academic reputation is based largely on the quantity and quality of its applicants which results in very selective admissions. The reputation isn't really based on the quality of professors or their academic/research productivity. That's why BYU is ranked very high in admission-weighted rankings like USNWR and pretty low in academic productivity/research-weighted rankings like ARWU. If dropping sports results in diminishing interest and decreased applications, BYU is entering a positive feedback loop of decreased interest --> decreased academic reputation --> decreased interest --> etc.