Using this logic, then Kansas should be playing in the Nat'l Championship as opposed to (or against) tOSU since their only loss was to a quality Missouri team who beat the team that tOSU lost to. Or, you could even say that Missouri should be in because their only losses were to the same team, OU, who is by far a better caliber team that Illini and is a better two-loss stand than any other team with 2 losses, including LSU.
Again, this is why a playoffs is needed.
Kansas? Is this a joke? My logic assumes someone has the most basic common sense about strength of schedule. which your application of my logic is missing. The following is wins against BCS conference teams with winning records, there are obvious flaws in using this, but I think it gives a general sense of strength of schedule without going to in depth, LSU probably had by far the toughest schedule:
Ohio State - 5
Oklahoma - 5
LSU - 4
Georgia - 4
USC - 2
Kansas - 1
Again, I think its close between LSU and Oklahoma, but the fact LSU's losses were both in overtime, and they had a tougher overall schedule than Oklahoma, and only lost to teams with winning records, I think they deserve a slight edge.