Lets imagine that the pods were set up this last year as

West: Oklahoma St, BYU, Texas Tech
South: Baylor, Houston, TCU
North: Iowa St, Kansas St, Kansas
East: Cincy, UCF, West Virginia

It just so happens that the West would be a bit stronger that year with OK St as the #1 and BYU as the #2, while the North would be weaker.  If you just look at Big 12 standings, you'd think a 7-6 Iowa St (5-4 in conference) would be the #1 

But let's take a closer look at this.  Iowa St would have played 3 non-conference games (wins against Northern Iowa and UNLV and a loss to Iowa), and in conference play would have matched up against OK St (L), BYU (TBD), Texas Tech (L), Cincy (TBD), UCF (TBD), West Virginia (L), Kansas St (W), Kansas (W).  So let's assume they lose to BYU and Cincy and beat UCF, that gives them a 3-5 conference record to that point, and 5-6 overall.  That means they're not the 1 seed in that pod.

Meanwhile Kansas St would have 3 non-conference wins (beating Stanford, Southern Illinois, and Nevada) and then would have played OK St (L), BYU (TBD), Texas Tech (W), Cincy (TBD), UCF (TBD), West Virginia (W), Iowa St (L), Kansas (W) in conference.  Giving them the same losses to Cincy/BYU and win against UCF means Kansas St finishes with a 7-4 overall record and 4-4 in conference.  So that's pretty close to as bad as it could get.

But now Kansas St gets matched up against #8 Baylor in the final week of the season.  Odds are REALLY high that Kansas St doesn't win that game to get to the CCG.  But if they do, they get matched up against Oklahoma St or Cincy, who is another really highly rated team (#4 at worst, possibly higher given that they just beat the other).  So now the odds are REALLY high that Kansas St doesn't win that game.

But if they do, now you've got a Kansas St conference champion that had a rough stretch mid-season, but is now 9-4 with two consecutive wins over top 10 teams.  In an expanded playoff, that conference champ gets in (plus some of the other #1s have an argument as well)