The assertion that "WSU already was ranked x with P5 status, so losing P5 status doesn't matter," as argued above, as well as this one, that it's the second-best public university in Washington, and that won't change, so this doesn't matter, don't make a ton of sense to me.
With regard to the first, yes, WSU's academic ranking has been falling anyway. That doesn't mean that an incremental loss of applications due to losing P5 status, and a corresponding decrease of selectivity metrics (the primary thing that matters for undergrad degree prestige), won't cause a further fall in prestige or place a lid on any increase in prestige that might otherwise be obtained.
Same thing with being the second-best public university in the state. Yeah, that's a foundation that puts some kind of floor in for enrollment, and is unlikely to change, but getting applicants from other states matters as well, as does keeping kids in-state who are looking at other options. ASU is the second-most prestigious public university in Arizona, for example, and if it lost P5 status for some reason and was in the small-time with Fresno State and its ilk, that absolutely would matter. It gets applicants from other states, too. Same for WSU, and that's likely to continue with the difficulty of admission to top schools in California, for example, showing no sign of decreasing. Big-time college athletics matter even more, I would argue, at a rural campus like WSU with comparably little going on than at most schools.
Looking at it from the opposite perspective, many universities have used athletic success to effect a massive change in their academic standing. It stands to reason that the opposite applies, too. I grant that being in P5 doesn't necessarily equate to nationally-relevant success, and also that it's possible to be relevant nationally despite being in the minor leagues (e.g., Boise State). That's not going to happen at WSU, though. I know just from common sense and having some kids looking at college in coming years that something like big-time athletics absolutely matters. It's just intuitive and makes sense as confirmed by my conversation with my son just now. He and his friends look at things like that at the margin, and to them, it's so intuitive that calling into question draws a puzzled look. These are kids who aren't even sports-obsessed, necessarily. They just look at, say, Colorado State or Fresno State, and both assume these are vastly inferior to, and pay no attention to it, relative to the Power 5 schools they hear about all the time, even though the academics might be similar in the case of some Big 12 and SEC schools, especially. No, they won't just make decisions based on that, but to me, it's like the arguments I used to hear in recruiting that myriad things "don't matter." They all matter, at least to some people and at least at some level. And again, I contend all of this matters more in Pullman than it would if the school was in a reasonably sized metro area.