I think the problem is that you miss the results part of the equation by just focusing on the coaching ability issue.
Collins' tenure is so long at this point that the only way to sustain it is to provide results. It's not entirely about just his ability to coach. Maybe he has really transformed as a coach over the past year, but without results, his tenure is not sustainable given how long it's been and given the poor results of the past 5 years.
If you extend him after an NIT season this year and then next year is a losing season, you have an extended coach that had 6 losing seasons out of 7 with an NIT bid as the lone "successful" season.
Then you're in as bad of a situation as last year where you didn't really want to fire him because he had 3 years left on his contract. He has to get an NCAA bid this year or next year to be able to get an extension, I feel very strongly about that when you consider his entire tenure here. The problem is lack of results even if he's improved as a coach.
There's no reason to fall into a trap like that when he has 2 more years at this moment and as
@IdahoAlum points out, a lot of the reasons to have a coach on a long-term contract have changed in terms of recruiting changes and the portal.