I am surprised too. Michigan is his only coaching stop that hasn't been highly successful. He's been successful there, just not highly successful.
IMO, I think it is because he isn't doing anything at Michigan that is particularly unique anymore. Look at the stops he's had success; he was great at Stanford running a highly physical offense in a league not known for it. He was successful with the 49ers running a read option offense in a league that hadn't seen it and wasn't ready for it.
At Michigan, he runs more or less a typical offense and specifically has had trouble finding a QB. Harbaugh appears to have success when he does something outside the box relative to his competition, but he hasn't done that at Michigan.