Take everybody's comments and put them together and I think that gives you a good picture of the issue:
1) It is about the students. Alumni who attend is great, but midnight madness is really about the student population. Poison was on the right track.
2) Better acts/entertainment surely wouldn't hurt. At some schools Midnight Madness is a pep rally combined with an on-campus concert, or "fest" (TigerFest, Husky-fest, etc).
3) And nothing motivates students and alumni alike, like on the court success. And potential doesn't always cut it. Outside of people on this board most "fans" don't know a thing about Chris Obekpa or Marco Bourgault. Make the tournament two years in a row, and all of a sudden going to a basketball game is the "in" thing. But just because us die-hards see reason for optimism (albeit cautious optimism for some) that still doesn't mean the students will be whipped into a frenzy. Consistent success builds that.
Whenever we do this debate over student participation or attendance, it always comes down to a confluence of factors. Like I said, combine all the comments on here, and collectively that's what makes a program great.