I will not comment on the originally submitted system (IBM) vs what was installed and the reasons behind that. However...
As a former employee of NCSA, I think I can shed a little light on this, at least from the employment side. To my knowledge, they never fired an admin, at least not recently (largely because firing people at the University of Illinois is extremely difficult, even when it's totally justified in some cases). Certain admins left for better opportunities, but I can hardly blame them.
You mention both Cray and NCSA having issues finding new folks. That's two-fold in my opinion. Very few people _want_ to move to Champaign, IL. You have to be the kind of person that wants to live in a college town that's a good 2 hours from a big city, surrounded by corn fields, and has shitty winters (oddly I'm that person). In addition to that, partly because of the horrible State of Illinois budget issues and the fact that NCSA is a department of the UofI, they don't pay market rate for qualified individuals. They used to justify this by really good benefits, but those have all been eroded.
In a market where the best of the best (often working remotely from wherever they want) are making more than NCSA managers, it's no wonder they can't find anyone to fill technical positions. I'm not sure if other NSF funded institutions are in any better shape. Would Blue Waters really be better off at another location? I'm not sure.
All that said, I'm extremely grateful for my time at NCSA and the amount I was able to learn with state of the art technology. It's just that working will cool stuff (and great people) doesn't pay the bills anymore.