Geographically and keeping traditional rivalries together, I think it is a balance.
But....competitively? I totally agree with you. I think the West would be much stronger than the East. But, I have heard that Texas and Texas Tech will not split, Oklahoma and Oklahoma St. will not split, and Texas and Oklahoma insist on being in the same division also. Although it would be a very tough division for BYU, those are my favorite teams in the Big 12 and I would love to play them every year.