If you say that they deliberately hired Kompany, I see some atom of truth here because if they needed a coach better than Kompany, they should have taken their time to look for one after all the season have not started yet. Also they should have looked for a better coach and contact him before the season ends.
Nobody can give the names of coaches that the management of Bayern Munich contacted that told them they cannot coach the team, who knows if there are also average coaches like Kompany for them to reject the offer of coaching a big and successful club like Bayern Munich. I hope that Kompany gives his best and make the club happy with a good outcome.
All teams hire coaches they feel will deliver their jobs for them well and proper same as Bayern which is why they choose Kompany.
Are there better coaches out there?
All i know that we have old coaches that no team will risk given them coaching jobs because the pattern of the modern football is far different than the past, so hiring any old manager will not give the team a better result, they only need a young manager that can confidently compete with his mates to bring best result for the team.
Moreover, Kompany is not a bad coach, he failed in the Premier League just because he lack quality players that will withstand the Premier League pressure and the team didn't have money to sign more players, and beside that, no senior player will leave his team for Burnley; but in Munich, he will have all he wanted to do his job better.
I think Bayern Munich management has its own arguments regarding the decision to choose Kompany as coach. I think what you say is also true, perhaps the Munich management is analyzing whether a young coach with a modern football philosophy will be easier and able to bring the team back to achieving its mission. Moreover, Kompany also has a strong leadership character and he also has almost the same style as Pep Guardiola so that might be another reason to consider.