Agreed, it needs to be 16 teams.
There needs to be room for a worthy champion from all 11 conferences in the hypothetical instance that all conferences produce a worthy champion.
This year you may still have 3 undefeated teams from conferences that lack an automatic BCS qualifier -
Boise St. - WAC
Utah - MWC
Ball St. - MAC
Who's to say that you couldn't have that from C-USA, Sun-Belt, Independent as well ?
NCAA by-laws state that half of all tournament slots be reserved for "at-large". If this playoff were run by the NCAA, 16 slots could provide AQ's for the current 6 champions:
ACC, SEC, BE, B-10, B-XII, PAC. And there is room for 2 more, should 2 other conferences regularly produce worthy champions.
With 6 AQ's, there is room for 10 at-large teams. May as well just fill them based on rankings, with say, a cap of 3 teams from the same conference. This will allow the power conferences to have multiple slots, if their team's rankings warrant it.
At that point, it would be hard to imagine a team that had any claim to a shot at the NC not being included in having an opportunity to go out and win it on the field.
This would require 4 rounds of playoffs.
Round 1) Find 8 lesser bowls to host.
Round 2 - quarter-finals) Elevate the Cotton and Gator (?) to host 2 of these 4 games. Rotate the Rose, Fiesta, Sugar, and Orange through the other 2 quarter-final slots.
Round 3 - semi-finals) Rotate the Rose, Fiesta, Sugar, and Orange to host these 2 games.
Round 4 - N.C. game) One of the [Rose, Fiesta, Sugar, Orange] that got stuck with a quarter-final game gets to "double-host" and have the NC game as well.
Ultimately, this would be great for the fans.
But, if politically, only an 8-team playoff will fly at this point, then let's take what we can get, and then build on it. Otherwise we could be stuck with the lousy current BCS situation indefinitely.