Notre Dame is a bad loss, and while Michigan was ranked 11th and 6-0 before Michigan State beat them, none of their wins were over particularly good competition. Notre Dame was their best win, I guess, and that wasn't very impressive.
OTOH, the only teams with quality wins that I have lower than Michigan State are Kansas State, Boise State, Oregon, SMU and Illinois, so they can't really be "way too high".
Illinois' loss to OSU is at least as bad as losing to Notre Dame, and beating Baylor is not as good as beating Michigan, so Illinois should be lower.
SMU's loss to A&M is better, but their 'quality' win over TCU is suspect, so they should be lower.
The four remaining 'one win' teams are closer, and you could put them in pretty much any order and justify it.
Boise's undefeated and has maybe the best win of the four, but Georgia lost to South Carolina as well, so there's that.
Oregon has the best loss of the four vs. LSU, but their win over ASU isn't great.
K State's win is over Baylor, which doesn't compare great to the other wins here, but OTOH they are still undefeated.
So the lowest Michigan State could possibly be is 11th, really . . .