We should absolutely be a conference contender in 2016/2017.
Again, you manage to interject your own biases into the discussion with the "soft as toilet paper" comment - we've always played a finesse style of basketball, even when we went to the title game and won the Big Ten the following year. Plenty of fans showed up then. And even this year, we beat two top 15 teams (Maryland, Purdue) at home and made the tourney, so it's not like we were terrible.
The point about high level athletes is fair, though Dawkins was certainly a high level athlete (albeit not a particularly capable basketball player) and so was Caris, though he was injured. I'd also say Walton is above average for his position.
And again, we all recognize the team wasn't as good as it has been. But it's not like we won 10 games, either. So again, if the fans are only going to show up when the team is ranked in the top 10, that's pretty lame.
And really, I think it just speaks to whether students and other grads are basketball fans in general. Even if Michigan isn't great in a given year, if it were me, I'd still like to see some of the other good teams in the conference play.