The idea that a college president has to come from academia is somewhat unique to academia, I think. The CEO of a medical group is usually NOT a doctor. The coach of a college football team is usually NOT someone who was a successful professional football player. It stands to reason that a college president is sometimes not going to be simply a successful college professor who has transitioned into administration. Being a college professor and being a college administrator require different skill-sets.
In fact, if you look at college FB coaches, they are usually guys who played in college but barely even sniffed the NFL, or didn't even reach the NFL, or more likely who weren't even stars in college. A guy like Harbaugh with a long pro career is the exception; a guy like KF, who barely succeeded in college as a FB player, is the rule.
So why does a college president have to have been a successful tenured college professor, exactly?
The successful FB coach did not necessarily excel at playing football, but he almost certainly had experience playing it. I think Mike Leach is an exception, I don't think he played at any level beyond high school.
I think the primary criticism I have heard voiced is not that he has not been in the classroom (because he indeed has), but rather that he does not have experience in higher education administration. As others have pointed out, he has impressive experience in corporate administration, and there are certainly some very important, generalizable skills and experiences. But as others have pointed out, strategies for leading a for-profit entity certainly differ than those for leading a non-profit entity.
For what it is worth, I am a faculty member at The University, and the blanket characterizations of the University as a whole being one way or another are clearly over-simplifications. I have been around for over a decade, and I have seen examples of faculty entitlement and lack of accountability. I have also seen many more examples of faculty who bust their butts to help students in any way they can, going well above and beyond the "requirements" of their jobs. I have seen people with a lack of appreciation for how the private sector works, but also people who are doing everything possible to translate their research or teaching into application. I know faculty who think athletics are much too large of a priority (heck, I love sports, but sometimes things get a little ridiculous), but other faculty who are huge fans of all the Iowa teams.
As for the choice of president, I don't really know enough to tell you if it is good or bad, but I am going to give him the benefit of the doubt and see where the University goes over the next 5 years. There has already been a push to focus on bottom line (student credit hours), even if it at times costs instructional integrity. This has been especially evident since the floods of 2008. If things continue in that direction, I could see many GOOD faculty fleeing The University as they are being asked to teach more and more students for the same pay, which really makes it challenging to engage students and create higher-level thinking. However, maybe he will find ways to raise The University profile through smart allocation of resources, and we will go to new heights. I will keep my fingers crossed (in my ivory tower, while loathing my white, male self, and not tolerating the views of those from outside of academia
).