It's true that Penn State was the Big 10 champion, but it's ludicrous to suggest that a team with two losses should get into the playoffs and contend for the national championship just because they won their conference title game.
The 2011 season in the SEC almost turned the national championship into a joke. In that season, there were three SEC teams that ended up in the Top 5 in the national rankings -- Alabama at #1, LSU at #2, and Arkansas at #5. But because all three of these teams played in the same division of the SEC, only one of them could play in the SEC championship game. As it turned out, LSU finished with the best record in that division ... so they played in the conference title game against a Georgia team with four losses but finished at the top of their division because they were 7-1 in the conference. If LSU had lost to Georgia in that conference championship game, we could have seen the most ludicrous scenario of all with Alabama and Arkansas playing for the national title. Not only did neither of those teams win their conference championship ... but neither of them even played in the SEC title game!
In 2011, you left out the fact that LSU beat both Alabama and Arkansas during the season. I think LSU would have dropped only from 1 to 2 with a Georgia loss, unless it looked like the national title game.