If your conference only played conference games (just as an example), then the entire conference would have a .500 win-loss record. If your OOC games are more likely to be wins than losses (which is true for most P5 teams), then conference games are mathematically hurting your overall win-loss record.

Let's remove one cross-division game for each PAC 12 team last year and you can see how it would work:

UW- Doesn't matter, their two losses are to Oregon and Cal, so their record remains 10-2
WSU- Lost to USC, so if that's the game that gets taken away and replaced with an OOC win, they end the season 11-1
Stanford- Lost to Utah, so if that's the game that gets taken away and replaced with an OOC win, they end the season 9-3 and probably ranked
Oregon lost two cross-division games, to Utah and Arizona. Replace either with an OOC win, they end the season 9-3 and probably ranked
Cal lost two cross-division games too, to UCLA and Arizona. Replace either with an OOC win, they end 8-4
OSU sucked, so it wouldn't matter if you gave them an extra OOC game, even if it was a win, 2-10 isn't much worse than 3-9

Utah lost two cross-division games, to UW and WSU, so if you replace either of those with an OOC win, Utah ends the year 10-2 and ranked (even if they go on to lose the championship and Holiday bowl, they're ranked at 10-4).
ASU lost 3 cross-division games, to UW, Stanford, and Oregon, so replace any of those with an OOC win and they end 8-4 instead of 7-5.
USC lost 2 cross-division games, to Stanford and Cal, so replace either of those with an OOC win and they're going bowling at 6-6.
Arizona lost only one cross-division game, to WSU, but if that's the replacement then they go bowling at 6-6.
UCLA would be 4-8 with another win, so it wouldn't matter much to them.
CU would have been 6-6 with another win, and they lost all 4 of their cross division games.

Now, there are some obvious assumptions here, but best-case scenario, the PAC 12 playing 8 games would have resulted in 3 more ranked teams and 3 more bowl-eligible teams.