The injuries were huge for Michigan that year and why their record was what it was.

But also consider who Michigan played in 84 (these are the teams end of year rankings):

lost to BYU #1
lost to Wash #2
lost to Ohio St #13
lost to Iowa #16
beat Miami #18 (were #1 when Michigan beat them)
beat Wisconsin #20 before the bowls, finished #23 (of the then top 20)

They had 2 losses to unranked teams (MSU & Purdue) & they beat 2 top 20 teams.

Consider the kind of players Michigan must have had (prior to injuries) to have the following rankings the year before and after:

1983 9-3 AP#8, UPI#9
1985 10-1 AP#2, UPI#2 not to shabby.

Note - Washington also played Michigan in 1984. If BYU doesn't deserve a title for beating Michigan why should Washington?

Edit - btw I added this post before reading any of the other responses - nice to see for good measure others already pretty much detailed what I provided...