Not a bad concept but the aarguing will continue and who wants to go to Detroit?
I would just seed the 12 and layout out with firt round games on campus. No automatic conf-based byes is the biggest change that has to happen.
There will never be more than four teams with realistic shot to win it so the others are just warm ups and argument starters.
Detroit as a neutral site would be better than an away game. Memphis or Nashville in TN would be preferable. Bet those bowl games would make a lot more $$$ as first round playoff bowls.
Other idea is work something out with the NFL to use the NFL stadium that is best located for both teams (for first round). So, Lucas Oil for the IU/ND game.