I guess the voters respected the fact that TCU had to play an extra game, and that they beat Michigan fair and square between the white lines. I'm okay with the ranking, it's not like anything other than #1 really matters anyway.
The plaque for alternates is down in the ladies' room. 
There's no objectively right or wrong answer, but here's my thinking.
TCU's regular season was impressive, but not dominant. They beat SMU by 8, Kansas by 7, oSu by 3 in 2OT, and Baylor by 1.
TCU didn't win the Big 12 CCG. They lost it in OT to a team that got smoked in the Sugar Bowl.
In the CFP semis, they narrowly beat Michigan, who was the B1G champion and who stomped Ohio State in the regular season. That would have ensured them at least a #2 final ranking.
Except that in the NCG they lost in the biggest blowout in bowl game history.
I think that Michigan, at 13-1, despite its 6-point loss to TCU, produced a better body of work than TCU at 13-2.
The case for Ohio State, at 11-2, passing TCU would be much weaker. I'd stick with TCU at #3.
As you say, all that matters (nowadays) is #1.
Once upon a time that was not the case. It was a thing that at least seemed to matter when FSU went a dozen or so years finishing in the AP top 5.
