While "keep it in the family" was a big reason KO got the job, "keep it in the family" is not the reason he's struggling with it. Right now it just looks like he's not that good a head coach and is probably better cut out to be an assistant.
Hiring Pikiell would be a totally different proposition. If he gets the job he'll have been a head coach for 13 years, the last 2 at a P5 school that heavily recruits the northeast. He has 225ish career wins, multiple postseason appearances, built a program from scratch and looks like he's in the process of resurrecting another from the dead. There is no question he can lead a program.
Hiring Donyell as his associate head coach would address a clear need – we haven't successfully developed our big men for a decade, right? And while there would be questions about his ability to recruit high-level talent (he's never done it), he's put in the work as an assistant for more than half a decade, and as a head coach for two years. And his team (traditionally one of the worst in the country) is improving.
Beyond that, "keep it in the family" could actually be an asset on the recruiting trail. UConn, as it stands, is not going to be a 15-20 year "destination school" for most coaches at this point, so every recruit would hear "yeah, he's after you but he'll be coaching at Michigan/Maryland/Virginia/Tennessee next year." The idea of UConn as a stepping stone would be a weapon.
Not against Pikiell, though. If he comes here, he's here to stay.
Is that a good enough reason to hire him, should the need arise? Not if there are better candidates out there.
But at the same time the fact that he's definitely part of the UConn family should not be a strike against him at all.
EDIT: And just to be clear, I'm still hoping KO figures this out. From what I've seen and heard, though, I seriously doubt that's going to happen.