I would really like for some high level politician to start threatening tax exempt status to keep these assholes in check. Good grief. Kicking the crap out of small schools is a huge part of what makes college football great.
I am surprised that no politicians are saying anything about large public institutions acting like corporations when it comes to conference re-alignment and screwing over other public institutions to make a few more bucks
It depends on how you restructure.
Let's say the 66 schools (5 major conferences plus BYU and ND) decide that they will be a part of this new division. They have the means and the willingness to participate. Below them will be, maybe, 10-20 other schools willing to do what they can to stay in "Division 4". You'll most likely see members of the AAC, MWC, and CUSA that are willing and able leave their respective conferences and band together to create one major, consolidated conference beneath them. Cincy, UConn, USF, UCF, Boise, CSU, etc. It could be one gigantic 16-20 member conference similar to the C-USA/MWC merger that was rumored to take place a couple of years ago.
So, now you'll have 80-90 members in Division 4. What you'd most likely be doing is moving the 30-40 schools that aren't willing or able to be in D4 bolster the FCS ranks or invite a stronger subset of FCS schools into a lower level FBS. Then you'd just say that D4 members can have one non-con game against FBS. Then we wouldn't see horrible FCS teams get slaughtered for a pay day any longer because your payday games would be KSU/Toledo instead of KSU/SELU.
For the basketball tournament, you can still pay your upper levels a stipend, but if you don't want to separate the tournament, you can just create an open tournament for D4 and D1 schools. This is where they'd probably expand the tournament to 96-128 teams and create a true play in round.
I guess what I'm trying to say is that you can probably make it work. It won't be pretty, but it could be feasible. In football, I don't think you'll see much of a difference. Basketball and the non-revenue sports will be pretty different. You may be able to fight off tax exemption hawks by keeping the NCAA tournament at all levels and or kicking back some playoff money back to the NCAA for distribution to all levels. I'm sure they can make it work as long as they stay a part of the NCAA.