By allowing ONLY conference champions, you ensure that all teams play to their best abilities every week. Win it, and you're in it. Lose it, you go to a bowl.
No need to bother with the ooc games. If OSU had lost all of its OOc games and then went through its conference schedule like it did, it'd go and MI and WI would set at home. It happens more often than you'd think, especially in the middle conferences.