I don't think it was just Paterno protecting Sandusky. You could easily flip it around, and say that Paterno would be seen as a hero for outing Sandusky and protecting Penn State - so why didn't he? Well, usually people who get away with things even though other know about it rely on a basic tool: blackmail.
Sandusky was apparently making boys available to other powerful people, political and wealthy people. I wish I could quote a refernce, but I don't know where I read this. I'm sure it's available with a little research. Anyway, if that's true, then that list of people would be an enormously powerful weapon Sandusky could use againt Penn State and Paterno to shut up about it. Then, being - by definition - a sick f***, Sandusky continued on for years in front of everyone.
This doesn't excuse Paterno, but it makes the dynamics more understandable. Sandusky must have had something more than just being a coach at PA t hold over Paterno, and I believe this was it.
And it also means the creatures on Sandusky's list are still at large.
I’ve heard the same—I believe it was initially said by a local radio personality who had a lot of inside sources. As I remember, the youth charity was suupplying boys to certain influential people. This is conjecture, but it makes a lot of sense when you look at the whole picture—obviously there were a lot of people who just didn’t view this activity as that much of a big deal.