I think the USC loss was their mulligan, but besides that I agree with that. What's really interesting is Michigan wouldn't have to worry about the Big10 championship game, where a 3rd loss could possibly knock them out of the playoffs if they did beat OSU.
I will find it interesting if it does play out with OSU winning out and Michigan winning out until The Game. Will it lessen the importance to OSU? On the surface i would say no, but it's not a must win like it would be for Michigan.