There are almost 130 teams at the FBS level. NCAA football is the only sport with a playoff format that people seriously make the argument that about 3% getting in is a good idea and having more somehow waters it down. We're on a hockey message board, a sport where over half the league gets in, but I don't think many would say that the Stanley Cup playoffs are awful. I don't see increasing that to 8/130 (6% of teams) or 12/130 (9% of teams) really waters the talent level down too much. Sure, their might be some blowouts in the earlier round(s), but that doesn't diminish from the good games or invalidates the later games.
The argument that having one's backs against the wall from the very beginning is a relevant argument for the importance of the regular season, but it was essentially killed the second the playoff was created in the first place. We've already seen teams with bad losses get in. And I'd hardly say that increasing to 8 or 12 or even 16 teams would invalidate entire months, as teams would still likely have to be one of the best teams in their conference to get in and even sliding to second or third best might put you in for an awful first round matchup or put you precariously close to not getting in.
Plus, as mentioned, this year we have an example of a school that literally could do nothing to get into the playoff. That's a sign of the system being fundamentally broken, whereby a team could conceivably do everything right and still not get in to the national title conversation. Where's the back against the wall situation for UCF?