Why do you assume that? He's a long tenured head coach at a very respectable basketball school in a basketball crazed state. He doesn't attract top talent at Purdue because he knows a lot of type tier guys don't really fit his "system" nor does top tier talent want to play in his system. It's hard to recruit a top flight PG to a system that doesn't feature or need a true PG nor do a lot of of top tier guys with NBA aspirations want to play in an offense that runs through a 7 foot, back to the basket player almost every year. Painter is great at what he does and that's getting guys who fit his system, but a lot of those guys are low ceiling players and compromise Purdue's ability to win in March. Unless you think he totally changes his approach and philosophy, he'd struggle recruiting here.
I don't disagree that he'd have better luck at landing the higher rated token "in-state" players at IU, but I think you're crazy if you think he'd waltz into Bloomington and start plucking national 5 stars just because "it's Indiana". That's not his style nor his fit. And I think he's perfectly comfortable with that. Plenty of teams with recent national success (Virginia, Wisconsin, Texas Tech) run "systems" that aren't conducive to the NBA who don't get type flight talent either, it's not limited to Purdue. Archie got Romeo and TJD (who was going to IU regardless) but his overall recruiting was a joke despite coaching at Indiana and its because his offense wasn't catered to players with NBA dreams.