Next, lets remember that in 2002, the football team was just coming off two losing seasons. While it's true that people weren't clamoring for Coach Paterno's resignation, one can assume that he didn't have too much ability to threaten. Also, it's not really in his nature to make the kind of threats that you propose. He was more of a straight shooter, in your lane, kind of guy. He reported what he had heard to the people that were supposed to deal with it. I can't imagine that he would think that it would be necessary to threaten them at that time.
So, he was worried about his job, his reputation and the school's reputation. All valid reasons for turning a blind eye to boys being raped.

There are no excuses, period, for not following up on a reported child molester when you see nothing has been done.