Biggs, why would Wisconsin be "terrible?" Madison is a city of 250,000 in the middle of the most densely populated area of the state. Missouri is a pretty big state (I've heard it compared to Washington pretty frequently, for what it's worth), and Columbia is right between two fairly large cities (Kansas City and St. Louis) that are both less than two hours away by interstate highway. We all know about Oregon's special circumstances. Missouri and Wisconsin also don't have any BCS-level football competition in their states.
You're on point with a good amount of things on here, but whenever the topic of expanding the stadium comes up, you're way off base with these fantasies about a 70,000-seat stadium in Pullman. Not only would it never happen for a myriad of financial and practical reasons, but in a hypoethetical universe where the university spent $250m on that, the 30,000-60,000 empty seats (the latter for those Thursday night games on ESPN) would be tremendously embarrassing to the program. It would be ridiculous.
As far as 4-star recruits choosing schools with big stadiums, there's a fine, yet critical, distinction between causation and correlation. USC might lose some recruiting battles to Michigan or Texas if it had Martin Stadium in LA, but putting an empty LA Colosseum in Pullman wouldn't cause the 4-star recruits choosing USC to instead attend WSU.
To be clear, you're right about a point that I think you're trying to make ... WSU needs to have outstanding facilities and venues to recruit to (and by "outstanding," I mean they ideally should be much better than average in the Pac-12 in ways that can be articulated and demonstrated to recruits). A huge, empty stadium with tarped off areas would become a running joke, though.