I look at it from a different perspective. Once Utah moved to the PAC 12, things changed and it's not about Utah being "too good" or "above" the rivalry.
The fact is, Utah is one of the strange exceptions that has an in-state rival not in their conference, added with the fact that they have to play 9 conference games. South Carolina and Clemson are an example of in-state rivals in different conferences, but they both get the luxury of having 4 non conference games.
I am willing to move on from tradition if it helps Utah. From a recruiting angle, I'd rather schedule non conference games against teams from Texas (a series with Baylor is on the books in a few years), Florida, Cali, the Midwest, etc. I think it helps expand Utah's recruiting footprint and program exposure. Utah also wants to make scheduling 7 home games the norm each year. They're not there yet but playing the in-state schools with home and home agreements makes that hard to do.
Utah is still new to their conference and in the midst of forging new rivalries and new traditions. I think the overwhelming majority of Ute fans have enjoyed having Michigan on the schedule the past two seasons and would have no problems if that type of scheduling was able to continue. I'd also argue that Utah hasn't hurt their brand one bit the last 2 seasons. In fact, it's probably stronger than it's ever been and that's without you know who on the schedule.