Perhaps the BEST B1G Forum anywhere, here at College Football Fan Site, CFB51!!!

And none of that deals with having 3 teams outside the top 10 in our 8-team playoff, including an unranked team.  F- that noise.

FWIW:
The 2012 situation in the B1G would be EXTREMELY unusual and possibly never happen again.  Here is everything that had to happen for the B1G to end up with an unranked Champion:

• Ohio State goes 8-0/12-0 but is under a postseason ban so they can't go to the B1GCG.  
• Penn State goes 6-2/8-4 (lost to OhioU, Virginia, Ohio State, and Nebraska) but is also under a postseason ban so they can't go to the B1GCG.  
• The dropoff in the tOSU/PSU division is so severe that the #3 team is 4-4/7-5 Wisconsin (lost to OrSU, Nebraska, MSU, tOSU, and PSU).  
• Wisconsin, despite losing to Nebraska in the regular season destroys Nebraska in the B1GCG to finish 8-5.  

The chances of all of that happening again are slim-to-none.  

Additionally, to be fair to 2012 Wisconsin they were better than their record and underrated.  Three of their five losses were in OT (MSU, tOSU, PSU) and the other two were by three points each (OrSU, UNL).  Additionally, three of their five losses were on the road (OrSU - not just road by REALLY far, UNL, PSU).  

That said, allowing auto-bids for conference champions is definitely going to result in some teams that do NOT have a reasonable argument to be in the top-8 getting in.  The G5 Champion is obvious but even beyond that there are going to be CCG upsets and relatively weak P5 Champions as well.  Most are going to be more like VaTech in your example above and ranked ~20.  

As I've said before, I get your argument.  In theory I agree that an 8-team playoff should be the best eight teams.  The stumbling block for me is that in reality there isn't enough inter-league play among the top teams for us to be able to REALLY know that the PAC Champion sucks.  We might all think so but in a given year there is almost zero chance that the PAC Champion has played more than one game against top teams from other conferences.  Maybe they got blown out by the fifth best team in the SEC or lost at home to the third best team in the B1G but upsets happen.  Maybe that was just a bad day for them.  

Aside from that there is, as I discussed in another thread, political/legal pressure to give every team a chance.  That pressure is probably insurmountable.  Eight teams with the five P5 Champs, the highest ranked G5 Champ, and two at-large teams is a hybrid/compromise between the hardline "Champions only" position and the hardline "Best teams only" position.  

Arguments for/against as I see them:

Arguments for limiting it to two teams per conference:
In theory Bama could lose to Auburn on a crazy fluke kick-6 and finish 11-1 but miss the SECCG while Florida loses to Georgia on some similarly bizarre and "fluky" play and also finishes 11-1 but not in the SECCG.  Then we could all watch while the SECCG matches the third and fourth best SEC teams in Auburn and Georgia while the best two SEC teams (UF and Bama) sit at home.  In that case it makes sense for Bama and Florida to both get at-large bids.  

In practice, the chances of all of that happening in the same year are slim-to-none.  

If two teams from your conference are already in and your team is being considered for the second at-large spot it means that:

• Your team didn't win their conference.  They had a chance to do that and didn't do it, and
• Your team also wasn't the highest ranked non-champion from your conference.  They had a chance to do that and didn't do that either.  

So the argument is that if your team doesn't win their league AND isn't the highest ranked non-Champion from their league then it isn't unfair to exclude them.  

Arguments for not limiting it to two teams per conference:
My theoretical above with Bama/UF being the best two SEC teams but missing the SECCG could happen.  Even if not, maybe Iowa and Ohio State really were the best two non-champions in 2015.  They both only lost once.  Iowa lost a close B1GCG and Ohio State lost a close game to MSU.  Maybe Ohio State and Michigan really were the best two non-champions in 2016.  Ohio State lost a close road game at PSU and Michigan lost two close road games to good teams (1 point at Iowa, OT at tOSU).  

If we are going to have at-large teams we should take the best ones available and excluding 2015 Ohio State because Iowa already got in doesn't make sense.  Neither does excluding 2016 Michigan because Ohio State already got in.  

I would be content if it happened a couple of times.  No big deal to me.

I of course don't like the 8 team playoff idea at all, but that is moot.

I think we all know the outlier seasons to test the limits of these proposals are 2008 (Big XII 3-way tie) and 2012 (3 SEC teams in top 4 before championship week).
5 Conf champs + 2 At-Large + 1 G5
2008:
Big XII Champ:  #1 Oklahoma
SEC Champ:  #2 Florida
Pac-10 Champ:  #5 USC
G5 Rep:  #6 Utah
B10 Champ:  #8 Penn St
ACC Champ:  #19 VA Tech
.............................
Now first of all, screw this.  A 19th-ranked team in any 8-team playoff is crap.
Secondly, even if you shrug and say they won the ACC, they earned their way in, look at this:
#3 Texas went 11-1
#4 Alabama went 11-1
#7 Texas Tech went 11-1
#9 Boise State went 12-0, and if you're a proponent for G5 teams getting in, the Broncos have the bad luck here of G5 Utah being ranked higher. 
.......................
Anyway, so we let in Texas and Alabama, right?  Despite Texas Tech beating Texas and having the same record?  Say what you want, but in this case, we're right back to square one of helmet-osity and rewarding early losses over later losses (UT lost earlier than TTU did). 

Tech beat Texas 39-33 but lost 2 games later to Oklahoma 65-21.  I suspect that point differential was more important in the rankings than when the game was played.