You just answered your own question. UK has ZERO to gain by playing IU because we are (in your own words) "head and shoulders above IU". This is not the case with Duke, Kansas and UNC as well as many other schools. If we beat IU...big deal, so what. If we beat Duke, Kansas, UNC and other top programs, our resume will look better for it. And like Duke and other blue bloods, we will have our share of cup cakes sprinkled in here and there. IU does not qualify as a worthy "Blue Blood" that would benefit us to schedule and beat nor do they qualify as one of those cup cake teams that we are all but guaranteed a victory. IU does not help UK's RPI or resume unless we play them and hand them a beat down margin of victory similar to what we did to Kansas and UCLA.
There just isn't anything to gain and I take no pleasure in playing a team with a fan base that is as disrespectful as IU fans have been. IU is far and away the most annoying fan base towards UK than all the other fan bases combined! I would just assume be in a room full of Duke and UL fans than be around more than 4 or 5 IU fans.
Now I don't know you, Da_Bull (you may be the exception to what I have found to be the "typical" IU fan) but I have been sadly disappointed with nearly every direct IU fan encounter I have had.
I am not totally opposed to neutral sites between UK and IU but I'm not dying for it either. I could frankly care less. IU means that little to me. I am 100% opposed to any home and home games between these programs because I don't care to live through that circus/riot like experience again.