With hard decisions and controversial picks for the National Title game in recent years I think its time for an 8 team playoff system.
The 6 main BCS conferences (ACC, Big Ten, Big 12, Big East, Pac 12, Southeastern) will each get 1 bid for their top contender.
The other 2 contenders would be at large bids, Competitors from non BCS Conferences. Examples Boise State (Western Athletic Conference) and TCU, (Mountain West Conference)
The teams would play a one game knock out to decide who moves on.
The winner of the playoff will win the National Championship, and the two losers of the semi finals would play a consolation game which would be the Rose Bowl.
I hope the NCAA Officials decide to do this and keep minor bowl games for players that don’t make the playoffs.
Overall this would be a much for exciting finish to the season that would get more views and better ratings.
Bad System
bostonsportscp 
Here’s a slightly different take on that proposal:
http://members.shaw.ca/wxdog/ncaa.html
Another idea that i had was making the conference championship games determine who goes on to the playoff. But to be honest, your system may work just it will take a long time to figure all that out and change the already well established conferences. In foreseeable future an NCAA DIV 1 playoff will have to be simple as a starting point to build off of
Here’s a slightly different take on that proposal:
http://members.shaw.ca/wxdog/ncaa.html