The NCAA really needs to mind it's own business in this case. Just because the crimes were committed by a coach, and happened on school property doesn't make it their business. Even if there was a coverup by administration and other coaches. Now, if this were about improper benefits or something that the NCAA bylaws cover, and there was a massive coverup for years, then by all means. But this is a criminal investigation that just so happens to involve coaches and the administration. The NCAA can't just make up a bylaw out of the blue and retroactively apply it to a situation that happened before the bylaw existed.
As JR hinted to, the whole "lack of institutional control" is a phrase fans love to throw around as if it is just a generic catchall, but it isn't. There is a specific definition for it, and this shit doesn't meet the criteria. In general:
http://www.ncaa.org/wps/wcm/connect/public/NCAA/Enforcement/Process/ChargingA lack of institutional control is found when the Committee on Infractions determines that major violations occurred and the institution failed to display:
•Adequate compliance measures.
•Appropriate education on those compliance measures.
•Sufficient monitoring to ensure the compliance measures are followed.
•Swift action upon learning of a violation.
If PSU actually committed an NCAA violation, then sure, LOIC may apply. The NCAA bylaws just don't contain any sort of language to cover this.