There is a solution to all of this but of course it will never happen. Like FCS, there need to be smaller conferences and no conference championship games. Then the playoff can be expanded to 16 teams, and the also-rans can have the bowls. No way the conferences or schools would go for that, I get it, but college football cannot continue with the Power5/Group of 5 crap. There is nothing the G5 have to play for.
I agree, it would be a much more elegant, and geographically efficient solution. Unfortunately, you're not going to create 3 more power conferences by pulling 10 teams out of the existing P5 and promoting 20 others from the G5. P5 doesn't want to lose teams (and game inventory/money) just to create competition.
MAYBE you could kill one P5, fold it into the others along with 20 G5s, and then have 'divisions' in the P4 that are separate conferences in all but name (since they'd have like 8-9 teams per division). But no P5 is going to volunteer to die; unless the Big12 falters or the Pac12 goes broke and has to be rolled into the Big12 out of necessity.
Imagine the Pac rolled into the Big12. Four 6-team divisions:
Stoners - Wash, Wazzu, Colorado, Oregon, Oregon St, Utah
Steers - UT, TT, TCU, Bay, OU, OSU
Surfers - UCLA, USC, Stanford, Cal, UA, ASU
Soybeans - ISU, KU, KSU, WV
Yeah it doesn't add up, but with 2 minutes of thought its better than Legends and Leaders already...