To be honest, I can't recall why I didn't run in the Naked Mile. I may have missed the start or, more plausibly, was too drunk to run (this was the last day of exams). My girlfriend ran in it, as did several of my housemates. I only witnessed a couple of Naked Miles during my time at U of M.
U of M doesn't punish anyone for running in the Mile. As I mentioned, U of M police provide crowd-control duties.
Interesting, many here say it was perfectly acceptable, and mainstream, yet no one here will admit to running around in public, butt naked.