Look at the 4-loss teams that finished ranked and had any chance to be ranked higher than Utah (UCLA beat Utah but didn't make the CCG game; Utah both made it and won):
Utah #10
Kansas State #14
LSU #16
Notre Dame #18
Mississippi State #20
Notre Dame and Mississippi State didn't win 10 games or a division/conference. They're out.
LSU lost their last regular season game to a Texas A&M team that didn't make a bowl game (dropped 9 spots in the polls after that) and then the conference championship game. Beating Purdue by 8 TDs in the bowl game didn't make up for it. When you lose matters. For some dumb reason (this is true regardless of whether it impacts Utah's rankings; LSU losing at Texas A&M isn't much different from Utah losing at Florida; but first game vs last game...). They're out.
Kansas State ended the year with only 1 win against a ranked team (early in the season) and also lost to Tulane. They started the season unranked. They're out.
Utah beat the Heisman Trophy winner twice (well, 1 time; but they beat his team a second time). They started the season #7 and were considered by a few to be potential playoff dark-horse contenders. Preseason polls matter all season long. For some dumb reason (this is true regardless of whether it impacts Utah's rankings; just because in August people thought one team was going to be good and the other was going to be bad should have no bearing on actual ranking; but it does). That's why. Preseason polls; losing early/on the road.