I would say first that it's probably not a good thing to chase after a guy who just got fired. A lot of good guys have been fired, but it takes time to learn from mistakes and it typically takes a bit of a demotion back to the role of OC or DC before someone is ready to begin the challenge again. At this point, Pagano--if available--would likely be burnt out and a little lost. That's totally understandable on his part. Secondly, I don't really like Pagano as a HC. I never saw anything in him in Indy that impressed me. I don't see the attraction there.
I'm amazed at how little attention someone like Vic Fangio gets as an option. That guys defenses are usually good, hard nosed groups. He's been under some good coaches, I'd certainly like to bring him in for an interview at the least.
I agree with you assessment of the Colts roster. The GM of the Colts has done a terrible job of building this team. Take Luck off the roster and the talent on the Colts would be in the bottom five of all NFL teams. I think Pagano would be fine with a decent roster, but hopefully there will be a better candidate available after this season is over.