Offer your favorite up-and-coming offensive (or defensive) coordinator $8M per year, and you may find that he's willing to swallow the honor code and take a gamble on BYU. Pay position coaches $500K+ per year, and suddenly, BYU will find that the coaching pool is much larger. Better coaches=better teams and better players.
But you're right: BYU will still have a recruiting disadvantage. This is why top-flight, cutting-edge coaching is so critical at BYU. It's also why coaching at BYU is so much riskier and more difficult than coaching at virtually any other school. Because of these limitations and risks, if BYU wants to get coaches that are among that top 1% of the profession (and that's what it needs if it really wants to compete), it needs to offer them SIGNIFICANTLY more $$ than what they could get elsewhere.
During each of the next 5 years, Utah will likely make $10M+ more than BYU. An additional $10M per year could go a long way in finding a well-qualified coordinator.