This is exactly where those schools are now. They have no chance at being competitive going forward. All they have is being able to brag about being in the Big 10 or SEC. They will live vicariously off the wins of the blue bloods and act like they contributed something. It's a super Aggy existence. In this new model, they'd actually have a chance to win the division in a good year and get to the playoffs, because the blue bloods have been spread around and a blue blood can slip up from time to time.
But they are also the EXACT schools who stand to lose financially in this arrangement. Right now they get paid for their association with the blue bloods. That wouldn't happen here. The blue bloods would make more money than they do currently, because they aren't sharing equally with schools that generate so much less. The schools in the Big 12 and ACC probably go sideways financially, but we get rid of these stupid fucking nationwide conferences and have road games you can mostly drive to against schools who's fans you interact with daily. The G5 probably aren't making much more money either. But they have guaranteed access, which is the most important thing to them. They at least have an objective path towards having a shot.
I get it. You like being able to say "get the fuck out of my treehouse". This definitely eliminates that aspect of college sports, and truthfully, that's probably the biggest hang up. No one really acknowledges it, but that's a huge motivator for a lot of the people making these decisions. But if this was structured properly you could achieve giving the blue bloods the money they crave (and truthfully generate), you can give the middle programs sensible geography for their scheduling, and you can give the lower programs access.