The upcoming Friday night game against IU is a game Purdue wants to win. It is a home game that would damage Purdue's B1G title quest should they lose. In today's ESPN Bracketology, Purdue is a 2-seed, so a loss would likely drop them a line, but that while not desirable isn't terrible. It is a game against an in-state rival that Purdue would very much want to win for its fans.
Having written that, in order for IU to make the tourney, they need some big wins. At present, they are listed as out. A win in a nationally televised game would help a lot. Plus, it would make a fanbase that is somewhat despondent (simply read this thread or board for that matter) very, very happy. I see the upside for an IU win much greater than the upside for a Purdue win which to me correlates to greater pressure on IU as they need it more.
As for the OSU loss at Mackey Arena: the loss occurred because Purdue fell apart in the second half. They gave up a rather large lead and shot very poorly in the second half. Shooting percentage is highly correlated in a positive manner with fatigue. In the 10 days or so preceding the OSU loss, Purdue had road trips to both coasts of the USA. I attribute the loss to the extensive travel. This is not unique to Purdue. Illinois, Michigan and Iowa have been upset in games shortly after their West Coast trips. So I chalk OSU up more to the novelty of more travel and the resultant fatigue than anything else.