First, Donal Sutherland is right about adding teams one at a time.
I don't know what the blocker rule was. But yeah the rules say for Illinois to get pushed in, and because of that, beating them doesn't give any points for Indiana.
Unfortunately IU got a tough break this year (if our projections hold true). The only qualifiers they beat were UTEP (at Pre-Nats) and Illinois (at Big 10s), so they just had one point. They didn't go to a big early-season meet like Griak. The unpopularity of Pre-Nats compared to Wisconsin Invite may have hurt them.
In favor of the selection process, I do think Illinois earned their way in by beating the #13 ranked team Iowa State at regionals. Indiana has a solid team but they just had to get a bit more done either during the season or at regionals.