The reason UM hasn't made the CWS since the 1980s is because they were cheating at baseball. Coach Bud Middaugh created fake jobs to funnel cash to players, like walking around Michigan Stadium on football game days wearing a bib and holding up gameday programs. Players "found" $500 checks in their lockers on a periodic basis. Middaugh denied the allegations, but they were so obvious that Michigan Athletic Director Glenn Shembechler fired him almost immediately.
The banners came down, the trophies were returned, the record-books were changed, the scholarships were taken away. And the program sunk to the lowest level, after riding high for decades.
The screen shot below was taken from a CBS Sports web site. Links to other reference articles on the history of University of Michigan Baseball are listed below.