If, as many ITT seem to believe, IU truly is on the cusp of having a breakout year, now would be the time to offer an extension. Others have asked "what's the rush?" No rush but if you don't extend him 2-3 years (I do not support a longer extension) and we do have a breakout year chances are he'll be gone; scooped up by a more successful program who recognize what he might be able to do with even better overall talent. So there is a risk in not offering him a modest extension.
I'm new to this board and also a Colorado grad and season ticket holder so also want to offer a cautionary tale which turned out to be a bad historical lesson from CU. As you may recall, Gary Barnett was fired from CU after leading them to the Big 12 championship game as a result of the non-scandal "scandal". CU hired Dan Hawkins from Boise State who turned out to be a buffoon of astronomical proportions. But, at the time of his hiring he was arguably one of the hottest commodities in college coaching given the huge success of the Boise program. Of course, in hindsight, it appears that Chris Peterson was really the brains of that operation. His first year at the helm CU goes something like 2-10. The next year (2006?) we go to the Independence Bowl against Alabama. Then Hawkins is given an extension, the guy turns into the "anti-charisma" and fans are calling for his head from year 3 on. They can't/don't can him despite a huge outcry from the boosters/fans because they just extended him for another 5 years and the buyout was too much. Unable to take the onslaught of letters to the Board of Regents they finally cave about 3 years too late. They hire a "CU man" Jon Embree with no head coaching experience and his buddy Eric Bienemy who quickly prove that they have absolutely no idea what they're doing and are quickly canned at the end of their 2 year reign of terror. By now, November of 2012, CU is arguably one of the worst football programs in Division 1 football despite having been one of the top 20 winningest football programs before the "decade of disaster."
December of 2012 we hire Mike McIntyre who took San Jose State from 1-11 his first year to 10-2, a top 25 ranking and a bowl game in year 3. He hires former USF head coach and SF 49ers LB coach, Jim Leavitt, to be his Defensive Coordinator and Buff fans finally see the program slowly creeping back up out of the cellar after a decade of irrelevance.
This is the type of slide IU wants to prevent. We've never been up with the exception of a string of bowls under Mallory so the slide may not seem as severe but the example is offered to be cautious when considering/not considering an extension for Coach Wilson and is why I believe a 2-3 year extension is a reasonable demonstration of good faith to show we understand the hand he was dealt and believe he's on the cusp of moving the program forward (if he hasn't already). Clearly, he isn't the PR disaster and utter nozzle that Dan Hawkins turned out to be so I don't think the risk is anywhere near the same. I'm in for 2-3 year extension. Go Hoosiers!