Then I'd be curious to know WTF he was doing. This hire is the most important thing he'll be tasked with doing during his tenure as AD, and you're making the argument that still a week and a half after firing Dooley he simply hadn't gotten around to it yet?
I agree if he did publicly say he wasn't pursuing Gruden then people would have just said it was a smokescreen, but still, at least once everything played out he would have boosted his ultimate credibility with the fanbase by having been upfront with them from the start. Instead, he let the rumors hang out there for weeks by not addressing them and now forces us to get behind a second (or very likely worse) rate hire.
The only thing that frustrates me about the whole process so far is that the AD hasn't given any indication of what guys they are really after. That's why people's imaginations are running wild. If the plan all along was to get a mediocre mid-major coach, then that is what it is, but at least be honest with your fanbase and let them know that from the outset.