I'm torn on this one. One the one hand, I think the generic numbers would probably back up KF's decision.* On the other, if you think Iowa's offense was never going to get that close to the end zone again, or that their kicker was likely to miss that kick, then of course you go for the conversion there. I have to be honest - in the moment, my spidey sense was not screaming at me that he had to go for it there. It seemed like a close call.
* If you assume that kick is good 75% of the time (which seems reasonable, even for a college kicker), then Iowa is down 5 with ~5 min to go and Wisconsin has the ball at around their 25. The Advanced NFL Stats calculator is no longer available to the public, but I was able to find some numbers saying that an NFL team in Iowa's situation has a 12.5% chance of winning the game. If they miss the kick, their chances go down to 3%. I also found numbers saying a 4th and 5 conversion in that situation is successful about 50% of the time. If Iowa converts to, say, the Wisconsin 15, their win probability goes up to 8%. If not, it goes down to 3%, just like a missed FG. So...
Win probability (Kick) = .75*13 + .25*3 = 10.5%
Win probability (Go for it) = .5*8 + .5*3 = 5.5%
The benefit of kicking is that then Iowa could win the game outright with a touchdown. It's not likely that they would stop Wisky and march down to score, but the path to victory is clear. That is why you see such a relatively large bump in their WP from making the kick. If they convert the 4th down, three things have to happen for Iowa to win the game:they still have to 1) score the touchdown, 2) convert the 2 pt conversion, 3) win in overtime/not leave Wisconsin enough time to win in regular time.
I think we all have internalized the idea that Iowa is too incompetent on offense to run a good two-minute drill, so we're leery of any scenario that requires them doing that to win a game. But that cuts both ways – if Iowa's offense is incompetent, then their probability of converting that 4th down is lower, as is their probability of winning in OT. It's a tough decision either way. Maybe they should have gone for the gusto, on the theory that they were the worse team and they needed something high variance to win. I don't know. Having a non-functional passing offense really cripples you in late game situations.