Simple. They are successfully tapping their instate talent. The state of Georgia was raided by the Vols, Auburn and Florida for many years. Now Georgia is raking off most of the cream. Florida used to be second fiddle to Miami and FSU. Now they are top dog. Alabama with Saban is now getting more of their share of instate blue chippers, as well as LSU. Tennessee will always have a built in disadvantage in this respect. The talent pool is just too thin to win big in the SEC without going far afield. One reason I'm apprehensive about a new coach is the recruiting angle. Not only must this new guy be strong on X's and O's, he must be a d@mn good recruiter just to keep up.
I agree with you that we're not plucking as many top guys from those states, but that only means we need to change to a set of coaches that can actually coach up their players and beat teams that are more talented than they are.
Based solely upon talent, UCLA's first string (much less their 2nd, which is essentially who played offense for them) has no business even hanging with us for 2 quarters, much less beating us. However, Norm Chow, DeWayne Walker, and their special teams coach were able to take less talented players and put them in a position to succeed through their schemes and execution. Auburn has done the same thing for years. They've had some very good players, but they never out recruit Georgia, Florida, Alabama or LSU. They still seem to beat those teams, however, and it is not by coincidence.
We may not out recruit Florida, Georgia, or LSU anymore, but that does not mean we cannot win championships with the talent we have RIGHT NOW. It just takes coaching. It's obvious to me now that those great teams we had in the 1990s won so much because we were almost always the most talented team on the field.
For a more ridiculous hypothetical, what is the final score if UT plays UCLA after switching each others' respective coordinators? Except for special teams, of course, because we don't have one.