IMHO the problem you run into is the problem you always run into. Michigan and Ohio State.
Put them in the same division, and that division is automatically going to be the stronger division. Split them up, and suddenly you have to find a way to keep their annual rivalry and ALSO to keep their annual rivalry from resulting in a 2-game series the final week of the regular season and the CCG.
If you keep Michigan and OSU in the same division and put PSU, MSU, and Wisconsin in the opposite division, you're as close as you can get to competitive balance as possible, but the winner of that division will likely always be an underdog to those two. On top of it, if you stack the rest of the M/OSU division with patsies, you'll get criticized for basically making their division come down to the M/OSU winner every year and giving them an easy road to the CFP.
If we go to 16 and do the pods thing, this will all sorta resolve itself IMHO. UM and OSU can be in the same pod, and because their pod will rotate "division" alignment with the other three pods, they won't constantly be paired with the strongest of the other three pods, if there is one.