I don't know how many schools use this kind of succession plan, but it it can be hit or miss. Painter was HC at Southern Illinois when he was hired at Purdue. He was given the title of Associate HC knowing that Keady was going to be retiring the following year. Having played for Keady gave him a unique perspective on the culture of the program. Same with Davis and Scheyer. Mike Davis was an assistant under Knight, then was promoted to HC. He was great his first two years with Knights recruits, but it was downhill after that. Maybe the key is a guy that played in the system, then spent time as an assistant learning the culture from the coaches perspective. Also helps to have mentors like Coach K, Keady and Williams. Yet, as soon as I wrote this I remembered Matt Doherty who played at UNC then coached there and was a flop. IIRC he didn't spend time as an assistant under Dean Smith.
Salaries at a lot of schools are on par with UK, so why put up with the pressure of unrealistic donors and fanbase if the money isn't significantly better?