This is looking at each specific game. Yes, each game is reasonably winnable, but Illinois needs a sequence of reasonably winnable games to all go in Illinois' favor. Even assuming that Illinois loses to Ohio State, Illinois needs to win @Indiana, USC, and @Washington to be a favorite to make the playoff. I'm guessing that bettors would place Illinois' chances of winning that three-game sequence at.....+400 at best? +1000 at worst?
Using likely Vegas odds as of today, I think the general consensus is that all three of those games will be a coinflip in best case scenario (so say -110 odds). This would lead to about +600 at the books for a 3-leg parlay. I think you are near correct for the at worst portion. To get to about 10/1 odds in a 3-leg parlay, you would assume +125 odds for Illini to win in each game. As of today, I think it is safe to say that +125 would be the worst odds (for all three games) you will see.
However, if the Illini go 10-2, I think the Illini would in an extremely strong position to make the CFP. That is assuming that the Illini lose to OSU and one of the aforementioned games above. If the Illini get to 5-1 going into the OSU game, then I think the Washington game is the must win game to make CFP (as assumption is the OSU game is likely loss). If the Illini get to 6-0 going into the OSU game, the Illini will have some more wiggle room to slip up once after the OSU game (again assuming a loss to OSU).
The optimal scenario coming out of October is 8-0, but the near best case scenario is that the Illini get out of October at 7-1 (that would mean at least 4 very high-quality wins on the resume). That would leave an opening for the Illini to slip up once in November (likely @Wisconsin) and still feel in a pretty good position to make the CFP. 11-1 in the B1G is a lock for the CFP, but I believe that 10-2 in the B1G likely leaves at least a coin-flip chance of making the CFP.
Back to the general question for this thread: How good are the Illini? It is too soon to tell for me. There are some warning indicators from Saturday, but there are maybe only a few teams that can claim that they are well-oiled at this point of the season. The Illini might be fringe CFP territory in terms of raw talent, but there are few teams as well coached as the Illini. I think experience will also be on the side of Illinois this year.
We passed the first test of the season, but we will know much more about this team on 9/20 after the IU game.