Michigan isn't in the top 25 in either the AP, Coach's, or BCS.
Also, I think Hawaii will make the BCS if they win out. I don't think they'll win out. They have struggled against BAD teams. They won't make it to the championship game, mainly because their schedule is probably the easiest in recent 1A football history. Sagarin ranks their schedule behind 33 1AA teams. Colley has it ranked worse than 7 1AA teams. That's a seriously horrible schedule.
It can't work that way because you have to have rounds of playoffs, and what bowl game wants two teams that have already played in a bowl game? What kind of following are those teams going to bring to your bowl game? Sure there's TV revenue, but bringing fans is one of the chief reasons for the bowls existing in the first place.
Michigan Was in the top 25 until they lost to OSU. They were still in the top 25 after their opening loss to Appalachian State. I don't think any team should stay in the top 25 after week 1 unless they lose to another top 25 opponent. It's all about name recognition.
Read Below about Hawaii and how teams didn't want to play them. It's not their fault about their schedule.
ESPN - Schlabach: On (and off) the Mark - College Football
How would they be perceived if they were the team to beat Michigan in the opening game like they wanted. Or if MSU didn't pay them off so they wouldn't have to play them? Granted I'm assuming they win those games, but I've watched Hawaii play 3 or 4 times, and they look really good to me. At least when they have the ball.
As a fan, would you watch the Cyclones play in a playoff system, every game? Can't the bowl games be held at home? And the same bowls would definitely want to be a part of the playoff system just like they agreed to be a part of the BCS system that rotates who gets the National Championship. There is plenty of money to be made in a playoff system, if not more.