Ugh... why are Duck's fans like this?
Think about it in terms of progression, if that helps you comprehend what I am saying. Step one - earn the right to represent the North/South in the conference title game. Step two win that game. Step three win the Rose Bowl (or national championship game, which has other dependencies).
Oregon failed at step one, but had a great year and got to play in one hell of a consolation game as a result. (i.e. NOT the Rose Bowl, and NOT the National Championship game).
The reason you think that specific Rose Bowl was lackluster was due to the fact that both Ohio State and Penn State were ineligible for conference title games or bowl games, which is why Wisconsin played the Big 10 Championship instead.
Does the system make more sense to you now? I hope so. Rose Bowl > Fiesta Bowl.
Note: Ohio State would have toasted Nebraska and Stanford, and would have given you chaps a strong run for your money as well. Don't look now, they are AP #3.