Yeah, honestly I do think that it was the scheme. Hell, he was the OC for an undefeated Tulane team with their best record since 1939 and that certainly wasn't because Tulane was loaded with players that fit the scheme. It was because he invented an up tempo run game from the spread that pulled players out of the box and forced them to account for very mobile qbs in space. At WVU they had so much speed and such a systems advantage that they could take relatively one dimensional players and dominate with them because they just ran around and over gassed defenses who didn't know how to scheme against the read option.
Now, Rich Rod didn't lead Michigan to their worst record ever just because people figured out ways to defend the spread option, that was because of the player revolt as you point out, but the ensuing two years he reloaded well enough with good recruiting classes and had Denard Robinson at qb which was again, a good scheme fit. But his best year of his three in Ann Arbor was still only 7-6. At Michigan. You'd get fired at Pitt for that too.
There's a reason that his career record at Michigan and Arizona was 58-57 over nine years and it's because his offense was relatively solved and he was devoid of new ideas. Not there's anything wrong with having one really good idea and making millions off of it, mind you.