You are conflating "competitive games" with "ranked wins." It isn't "ranked teams are good, everyone else is bad."
First, they did beat a ranked team. Texas finished the year ranked. Just because they didn't happen to be ranked the week that Baylor played them doesn't mean they were a bad team.
Second, a lot of why they didn't beat any ranked teams (at the time) is because they only played one team that was ranked when they played them. They played Oklahoma - who finished as the #7 team in the country - twice, losing by three both times. That seems like a pretty good accomplishment in year three.
Third, another reason they didn't have a chance to play many ranked teams was because they and Oklahoma was beating everyone. The next tier in the Big XII was all solid but they kind of beat up on each other. Kansas State was a solid 8-5 team that beat #5 Oklahoma and #23 Iowa State. Oklahoma State was also 8-5 and beat #24 Kansas State and #23 Iowa State. Texas was 8-5 that only lost to eventual-national-champion LSU by 7, beat #16 Kansas State and thumped #11 Utah. Those are all pretty solid teams that Baylor beat, they just didn't happen to be ranked the week Baylor played them.
This entire argument is really missing the forest for the trees.