It'd be fine if WWE understood NXT is a televised show ONLY for 1 hour and ONLY in small buildings. Treat NXT like ROH. If they try to fill big stadiums w/ NXT and do monthly PPVs, it'd be a disaster. So literally taking something from their network and putting it on tv. But Vince would never do that.
The best part of NXT is the long builds and their shows freaking fly. An hour goes by in no time as opposed to 3 hours of Raw that feels like 10.
I think NXT can still work well with a weekly two hour show with proper booking. And if it takes over Smackdown and is a proper brand split, it will freshen up Raw since you won't have to see much of that talent on the NXT show. A three hour weekly show with the kind of talent the main roster has would not be difficult to book and write for if they actually gave a damn. Doing so for five hours a week with that same talent is very difficult not to overexpose.
There would be no need for NXT Smackdown to be a part of the monthly PPV cycle. The main roster talent on Raw has enough to cover that so you can still keep the NXT special cycle as is. I do think though that NXT would have to add one additional title to their card and take a small bit of talent from the main roster to fill some spots but not many.