For whatever reason, Bliss did not want to be at OU any longer. If I had to guess why, it would be that he figured it would be a long-term career-killer since OU was about football and Barry Switzer. Bliss clearly mailed in his last season at OU, then left Billy Tubbs with virtually nothing but one solid upperclassman (Raymond Whitley) and one good young talent piece to build around (Chucky Barnett). Beating Texas in the NCAA tournament in 1979 was pretty much the highlight of his NCAA Tournament resume as his best SMU and New Mexico teams struggled in March. What happened at Baylor was an example of perhaps the biggest meltdown by a head coach at any level of any sport EVER. I don't remember what the NCAA did to punish him, but they didn't need to do anything since his coaching career was OVER after that meltdown. When Lon Kruger took over at OU, he set up a scrimmage inviting all the past players and coaches to the event. Bliss got to coach in that game.
I don't know enough about Texas law to speak intelligently on why they released that murderer after 22 years. I only know Texas law by reputation - which is that they are tougher on crime than pretty much every other state. No state executes more murderers than Texas, so my guess is that if he got paroled early there, it likely would have happened in any other state as well.