You seem to forget that the NCAA exists because of the member institutions, not the other way around. The big football schools already have a very tenuous relationship with the NCAA. So let’s say that the NCAA did some draconian penalties like you proposed. Then what?
Well, then let’s say that Penn State left the NCAA and began to talk to other big time football schools about leaving the NCAA: free of scholarship limits and revenue sharing and free to form a “super conference” that could command a whopping TV contract. How would that work out for the NCAA?
The NCAA knows this is possible. This is why schools like Ohio State, USC, Alabama, and Penn State get lesser penalties in football and schools like SMU get the death penalty.
You have things exactly backwards. The NCAA exists solely as a screen to mitigate the likelihood of government bureaucrats and the courts stepping in to regulate sports.
A veneer of respectability shielding corrution and money laundering.
If the NCAA gets washed away (a possibility) then the replacement is never going to be the institutions regaining unchallenged control of their programs. It will instead be a byzantine labyrinth of government dictates presided over by judges, with court filings at every turn.
So, the NCAA, grandfathered in from a simpler time, or a legal minefield of governmemt regulation.
Those are the only two options.
Aside from the opportunity to play Penn State in the Pariah Bowl, what POSSIBLE benefit would any school, no matter what their gripes, real or imagined, with the NCAA, get from associating with the Nittany Lepers?