Isn't the very purpose of a playoff to determine who the best team over the long haul is? Why then would you not want to include a reasonable number of "eligibles", and let them sort it out on the field? Yes, there are going to be blowouts, but there will also be the occasional upset, and a majority of competitive games.
If anything, tonight shows what happens when you let a committee set a small field. An 8-team bracket using the old BCS formula might not have given us a different champion, but it would have given four more teams the opportunity to upset them.
Football is played on the field. Settle it on the field, not in a boardroom.