While I think Harbaugh wore out his welcome, I also don't believe the team would deal with these mass retirements if he were still coaching. Vernon Davis clashed with Harbaugh towards the end yet seemed upset about the way he was fired; I'd imagine many players felt the same way.
I can tell some Michigan fans are getting a bit wary now. Harbaugh has refused to give them the red meat they want, at least publicly. He recently praised Michigan State and called them the big boys of the state; needless to say that upset some fans. But it's true: MSU has been on top lately, and recruits know it. Meanwhile the shirt thing has some folks puzzled. To me it's just him making a splash in SEC country. He won't win over top recruits there but I think he can nab various middle tier guys from the south. Hungry guys who want to make it to the league and believe Harbaugh can get them there. The team needs depth and this is a good way to get it.