If my information is correct, Notre Dame hasn't beaten a ranked team in something like 3+ years. Why anyone would expect them to be competitive in a BCS bowl game -- let alone win one -- is beyond me.
ND is the equivalent of a decent high school student who enrolls at MIT under an affirmative action program, then wonders why he can't muster a GPA any higher than 1.5 after three semesters.
I agree with all that you have said and have been saying the same thing for years. I do think though that one of the many reasons they are overrated is that so many in the media want them to be better then they are. It is a natural instinct to vote for the team that you want to win.