Bill O'Brien accepted the head coaching job at Penn State right around the start of the year in 2012, before we even had our first playoff game. That's why we brought in Josh McDaniels again for our SB stretch run.
Unless Bill O'Brien really got to see some behind the scenes action from Mallett in practice during his rookie year that warrants giving up a top 3 round draft choice, I think this is nothing more than Mike Lombardi fan speculation part II.
Mallett missed the entire OTA/minis due to the lockout, then proceeded to hold the clipboard on the sidelines in training camp as he attempted to try and pick up about 1/10th of our playbook. O'Brien was gone about 3-4 months later. In all reality, what could he have possibly seen that would warrant risking a top 3 round pick in his first season as an NFL head coach?
He'd have to be one hell of a gambler making a choice like that in his first attempt at an NFL draft, and that's not even taking the contract situation into account; where he'd have to guess as to what to sign Mallett to (unless they somehow worked out a 1 yr deal like Deus Irae proposed, which sounds good in theory, but doesn't happen too often when you're trading for a potential starting QB with a 2nd/3rd round pick).
Now, rumor has it that Mallett took a halfway decent year 2 step up in training camp and what he learned in our system, but O'Brien was long gone having coached PSU for over 8+ months at that point.