I actually think it's an alright proposal - I have posted similar in the past. You can maintain interest down the league by having cup and shield play off's as well, and hold a big finals day or weekend with 3 or 4 games.
The reality of the status quo is that we are maintaining enough teams for two divisions by the skin of our teeth, every year. The way things are going, it's inevitable that a single division is going to become the only option due to a lack of senior clubs. In the meantime, we've lost clubs that could potentially have made a go of it in a more inclusive structure.