Go to 8 teams. All power 5 champs + 2 at-large + 1 G5 make the playoff. The quarterfinals take place one week after conference championships and the top 4 seeds get home field. The top 4 seeds must also be conference champions. After the quarterfinals, the semifinals would work like they do now. The matchups for this year would be: 8 Western Michigan @ 1 Alabama 7 Oklahoma @ 2 Clemson 6 Michigan @ 3 Washington 5 Ohio State @ 4 Penn State 2015 would have been: 8 Houston @ 1 Clemson 7 Ohio State @ 2 Alabama 6 Stanford @ 3 Michigan State 5 Iowa @ 4 Oklahoma 2014 would have been: 8 Boise State @ 1 Alabama 7 Mississippi State @ 2 Oregon 6 TCU @ 3 Florida State 5 Baylor @ 4 Ohio State Any arguments for deserving teams being left out with these 8 team matchups would be much weaker than the arguments we are having now.
No, making the playoffs and losing to OSU is not a "disaster" unless you're Alabama. To the contrary, that would be a major accomplishment!