I think it is great to make the playoff large enough to represent each power conference and allow some at large bids so no one gets screwed over due to a 4 loss power 5 team sneaking in. Now the Iowa/Wisconsin/Minnesota of the world can have something to hope for even if they suffer a loss to OSU. Needing to be utterly perfect to make it is not entertaining. Utah beating USC shouldn't be a celebration because they got to ruin USC's season...it should catapult them into the playoff picture versus out.
Rivalry games are cool and all, but they are what they are. Hopefully more teams can have something to play for at the end of a season instead of trying to play spoiler. Watching fans freak out and get excited to play in a specific exhibition bowl game and watch a specific parade is...kinda sad.
I also don't necessarily agree that it is condensing the excitement of the regular season. Maybe it is a bit boring for select elite teams. Alabama/OSU/Georgia, sure, the regular season won't be too nail biting...but for the large majority of teams? It would be pretty epic. The #8-#12 seeds would be musical chairs.
If championship week still exists there could be some annoying issues though. Idling teams now are somewhat annoying to people and it could be worse in a 12 team format. Utah and Kansas State would have been playing for their lives while Penn State got to sit at home watching Michigan/OSU battle each other in nothing more than a seeding matchup