Dan saw a chance to be a HC at an SEC school and felt like it would be a good opportunity to make a name for himself. And if he failed at MSU, he could always go back to being an OC, and even if he failed as our HC, he would be highly sought after for that position.
So, really, coming to MSU was low risk, high reward for him when you think about it. He was replacing a coach that while I think a lot of people liked him as a person, he was also losing to Ole Miss 45-0 and had losing seasons four out of five years and really had not improved very much if at all from the time he took over.
If he can win seven-eight games here consistently- and Jackie proved you could do that, Thanks Jackie!- then a school like a Florida will probably come calling in a few years, or he could have the option of staying and become one of the best in MSU history and become a legend. And when people mention MSU, they would mention his name first- unlike if he was at Florida where he would be "another good coach along with Spurrier, Meyer, etc." And like I said, if he fails, he just goes out and finds someone that wants a good OC and will pay him well and does that. Or goes back to Meyer. No shame in that at all, either.