Eh, I think that game hurt our collective psyche more than it damaged our CFP brand for the entire season ... I mean, the national narrative on Saturday/Sunday was DECIDEDLY praising how we got unexpectedly punked last week and bounced back in a very admirable way. So if there is a scenario where we finish 10-2, losing at Washington/Wisconsin but BEATING Ohio State ... I just don't see any way a 9-3 Indiana team gets in over us simply because they beat us back in mid-September at their place, no matter how bad. The magnitude of the loss will be further back in people's minds and not as important - JMO, of course.
If that same 10-2 Illinois + 9-3 Indiana scenario happens where we DON'T beat Ohio State, I guess it gets more interesting. However, let's remember that Indiana is already 5-0; if they finish 9-3 and we assume two of the obvious losses are at Oregon and at Penn State, the third loss would have to be one of the following remaining games, in order of embarrassment...
at Maryland
vs. Michigan State
at Purdue
vs. UCLA
If they drop any one of those games, that will carry as much weight with the committee as an impressive beatdown of Illinois in September, especially if the passage of time continues to make it look like a bit of a perfect storm of Indiana's best game plus our worse game, rather than Indiana just being head-and-shoulders THAT much better than we are.
EDIT: However, I do appreciate your scenario of Indiana going 11-1 and allowing us to just not worry about them at all. I personally think any 10-2 Big Ten team gets in over any 9-3 Big Ten team after a glance at everyone's schedules, and if Indiana is winning at PSU, it almost CERTAINLY means PSU is going 9-3 (also losing at OSU), and 8-4 honestly isn't off the table with a game at Iowa on the schedule...
I'm taking it as a given that Oregon and OSU make the CFP. So, as you said, our concern is who do we want to fight for the third and fourth spot if we can keep winning? I think whether or not you want Indiana better than 9-3 depends almost entirely on if you think they have a prayer at winning one of the PSU and Oregon road games ... because I agree that 10-2 Indiana definitely gets in over 10-2 Illinois. So, the worst case scenario for us it seems is a 10-2 Indiana squad, as they didn't knock PSU out of contention and they are not below us, either.