The university president and athletic director were charged with perjury and obstruction of justice.

Paterno found out and reported it up in 1998. Sandusky was a coach until 1999. Sandusky got another coaching job and kept the children's charity that gave him access to victims. He wasn't indicted until 2011. If the athletic director and university president had gone to police regarding crimes committed on the campus by a university employee instead of covering it up, the victims who eventually got him sent to jail wouldn't have gone through years of molestation. Part of the blame for those crimes should fall on the people and institutions who allowed it to happen.

Penn State as an institution failed. Several levels of administration--the university president, board of directors, administrators, and athletic department--intentionally disregarded crimes against children, and didn't take steps to warn other employers about any risks with him and children.

The students and players had nothing to do with it, but kicking Penn State out of the NCAA for a few years and letting the players transfer to other schools would have been reasonable. It's not like taking away a football program would be the end of the university. BYU is in a basketball conference full of universities without football teams. If schools like Drexel (also in Pennsylvania), most of the Cal State schools (large state schools), and UVU (one of the five largest D1 schools without a football team) can survive without football, so can Penn State.

The concept behind the NCAA sanctions is that winning football is nice, but it's less important than keeping kids from being molested. Penn State replaced Sandusky and could have had a successful football program while protecting kids, but made a conscious choice to cover up Sandusky's crimes and let more kids be abused.