There are a lot of good points being made in this thread. From my view, had the Sandusky incident been the only incident, then I would absolutely agree the NCAA had no issue being involved. However, again in my opinion, the secret disciplinary culture within the PSU football program contributed to the way Sandusky's activities were hidden and the police were in no position to break up that culture.
For most of Joe's time as HC at PSU, he controlled every aspect of the program. He and often he alone, determined who would be punished for anything anyone in the football program did wrong. There were allegations and rumors of robberies, assaults, cheating, and so forth that popped up over the years. Police were rarely involved and if they were, they quickly and quietly left the scene and allowed Paterno to handle the situation. There was no thought to go to any authority outside of Joe for anything involving the football program. And, when PSU administrators who were responsible for investigating and ruling on student issues tried to involve themselves with football players, they were either quieted or fired. Finally, Penn State's record of compliance with NCAA by-laws is a well known charade--it wasn't that they never violated any, they just never reported and no one in their compliance department was brave enough to hold them accountable.
In my mind, the NCAA recognized this culture of secrecy as both an issue for overall NCAA authority and compliance, as well as one of the major contributors to Sandusky being able to continue his horrible actions over time. Had the issue been left solely up to law enforcement, then it is entirely possible that that sort of wall of silence would have impacted the trial. And, the culture of secrecy would have continued on anything else regarding the program. Therefore, the NCAA was the only body capable of shaking them up to the point where they (i.e. PSU) saw the need to open up and join the rest of college football in terms of compliance and transparency. I think they did the right thing at the time and I think the developments in the program since have proven that to be correct. Now that they have made the changes, I have no issue if the NCAA wants to reduce the penalties as they've had the effect that was needed.