I had a recent discussion with my parents on the subject. We concluded that while Spanier should have been fired (he didn't report it to ANYONE), Paterno should have been allowed to retire.
Consider Paterno's response when he first hears this. He has just been told that Jerry Sandusky - his colleague and friend - has been raping little boys. His first reaction is going to be disbelief. He thinks "should I go to the police" but decides that he won't be the one to drag his friend's name through the mud, especially if he's innocent. So he reports it to Spanier, but not the police.
Theology is the study of what G-d said. Science is the study of what G-d did.