As a UMass guy, I also know times change. In 1995, we rejected a chance to join CUSA and upgrade to football with a conference lined up. A10 football is now gone and the CAA is south-centric. If UMass has money issues with football and does not upgrade, and does not downgrade to D3, then there is money to be saved by being in a conference with less travel in the northeast. Make no mistake: creating a conference as such would be saying Umass has no plans to upgrade ever.
Since the "Dayton Rule" went into effect, I don't believe any D-I institution can play football anywhere but at the D-I level. That's what led to many of the MAAC and Pioneer League teams being reclassified as I-AA (now FCS). It also led to the eventual shutting down of programs at Siena, Fairfield, Iona, Lasalle, St. Peters, etc. because in effect they really were D-3 football programs. Pretty sure the only options for UMass (and UNH) are Non Scholarship D-I (Ivy, Patriot, Pioneer although the Patriot model won't save any money), Reduced Scholarship D-I (NEC), Full Scholarship D-I FCS (like today in the CAA), Full Scholarship D-I FBS (like your C-USA offer) or eliminating their program.
Agreed, there is money to be saved with a league with a tighter footprint, but UMass has never shown any interest in such an association. At least based on what I read from the many UMass posters on AGS. The same savings could be said about the all sports conference UMass chooses to belong to. Couldn't they save significant money by playing in America East? Just never seen any interest out of Amherst in doing so. And so far, even these tough economic times don't seem to be driving UMass back to a conference with a tighter Northeast footprint.
Don't think I knew about the C-USA offer, but 1995 didn't have the same communication vehicles of today! Was Temple included in that offer? JMHO, but UMass will need to upgrade their football program to become aligned with any conference with FBS aspirations or find a stable niche conference similar to what Hockey East provides for the ice hockey programs. Unfortunately, I don't think we can count on the CAA remaining to be that football niche for the foreseeable future. UMass may have to upgrade football to retain the basketball affiliations it desires or even to keep the FCS affiliations it prefers. You'd have more options in the realignment game if you played a higher level of football. Just like UConn has significantly more options than Villanova and Georgetown do because of the level of football they play. That's the reason UConn is in the B10 and ACC discussions and Nova and G'town aren't.