Nothing to do with being a 4th quarter team... they are a team full IAA talent. Scheme, heart, and brains keeps them in against BCS teams.
Good point Loco, Navy (and other military academies) has a harder time recruiting great high school players for a couple reasons. 1) Military colleges are much stricter than normal colleges. 2) After you graduate you have to serve in the Military at least 2 years, this deters great recruits because of the chance to play in the NFL sooner. 3) Academically, Navy has some harder than regular majors. (Aerospace Engineering, Physics, Operations Research to name a few.) This weeds out recruits that don't have the best test scores.