Why? Pure CFB politics, that's why. It's MI, they are a bigger national brand than NE and the media, therefore, likes them better. There are more MI alum in high places than there are NE alum, just look at ESPN, for e.g. They've got "pull". They sell more advertizing and MI gear outside of their immediate demographic. They come in just bellow Notre Dame in that regard.
At the time, '97, everybody knew that NE would have steamrolled MI in a head to head match up, just like we did Peyton's TN. But again, MI is a media darling, so they got the voters. If not for Frost's impassioned post game plea re: the team and OZ, who knows, MI may have gotten it all.