To answer the OP...both.
Yeah, this team was in no way shape or form going to win ten games the last two years. Anyone who expected that was idiotic. But I don't think it's unfair to be, let's say, 13-12 instead of 11-14. I mean, against UGA and USClite in 2011, while they had more talent, UT still could have won those games (I believed we should have beat UGA actually). And then you got UK, and then Vandy, who doesn't have our talent, was thisclose to beating us and should have (but hey, we won, that's how the game goes).
It doesn't have to be one or the other. It can be "Hey, yeah Dooley inherited a tough situation with a sucky roster and had to completely rebuild. He was not going to win a lot of games. However, there have been a good amount of coaching errors in Dooley's tenure that have cost us and possibly could hurt us in the future."