Sex Scandal and Penn State

I am confused. Everything that I have read has said the following:
1. there was a graduate student who saw some inappropriate behavior in a Penn State locker room, 2. the graduate student told Joe Paterno,
3. Joe Paterno (who was told that there was inapropriate behavior, but was not told the extent) told a university administrator and the Athletic Director,
4. Grand Jury = Joe Paterno told what he heard and what he did; the athletic director and administrator were asked what happened and LIED. So-- WHY is Joe Paterno's future with the school in question?

If he didn't know the full extent of the situation AND he reported it to his superiors, how is it that he has anything else to do? I have to say, I feel absolutely awful for the children involved and I personally think that child molesters have a special reservation in hell for the havoc they bring into young lives. Former coach Sandusky should be prosecuted to the full extent of the law-- there is no doubt in my mind. The assholes who lied about what happened should be too. Why would you lie about what you heard? You have two men who are saying exactly what they knew (Paterno and the grad student) and two jackasses that have nothing to gain or lose by telling the truth, who are lying. As far as I am concerned all three deserve trials, convictions and jail cells- for life.

But Joe Pa? Joe Pa took limited information, reported it and let his superiors handle to situation. I am confused as to why some don't believe that was the right thing to do. I'm confused as to what others are thinking that he could have done. A couple of months ago there was a certain Big Ten coach that lost his job because it was reported that he didn't tell his superiors about a situation (NOT a crime, a NCAA violation) and here you have a coach who actually DID tell his superiors and people are asking for him to retire too? Wow.