It was attendance issues, plain and simple. I think they looked at what could be done with all the 3 seeds and went ahead and did it. Michigan HAD to be a three seed somewhere. They were #12 in the pairwise and along with the overall 9, 10 and 11 seeds that means they had to be seeded 3rd somewhere. To remind you the rules state they can move a team within seeding bands but not to another seed, so a 12 can move to where the 9, 10 or 11 would be otherwise, but not to the 4 seed (overall 13-16) or 2 seed (overall 5-8 seed) band.
The odd thing to me is that for the last few seasons they didn't appear to be taking attendance issues into account when I think they could have made similar moves. It was posted elsewhere that the other regionals are doing OK with their ticket sales and I have no reason to doubt it nor can I verify it, but I know for a fact (and I understand MU fans don't necessarily want to hear it) that Fort Wayne sales were slow, and that is as much the fault of my team as anything. They pimped the ticketmaster site at every home game repeatedly during stoppages this season and I doubt they got a lot of action as poorly as Notre Dame looked, especially in the second half when folks really would have been thinking about our prospects. I know Detroit is perceived as a hole by a lot of people, but the only thing the NCAA can look at is raw numbers, and the fact is Miami people did not turn out too well this weekend, and on Saturday Michigan fans did. Michigan fans also turned out well when we played a "home" game there against them in 2005. To the tune of probably 5000 of the 8000 or so there. In retrospect I shouldn't have been surprised. This is the NC$$ after all.