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I wouldn't argue with much of that other than if someone has a terminal illness, telling him to stop smoking and excersize a bit more isn't really going to do much. Syaing 'yeah this is bad, but that was baderer!' isn't really a basis for sustainable improvement.
The problem as you rightly state is cash in the game, or lack of. Strangling the middle tier (Championship) wont help that one bit.
The collective turnover of Championship Clubs (at an approximate guess) is in the region of £7m per annum perhaps? Give or take 20%?
Kill that middle third and that money is pretty much lost because its income generally from your more traditional (nee parochial) sources. If my Club went under of ended upon a par with Miners or Easts then I'm not suddenly going to spend that cash watching Salford or Saints just as if Leeds went wonky you wouldn't be spending your cash at Odsal or your flatcaps arn't going to go the Wheldon Road.
The game doesn't have enough players as it is and loses to many adult players who don't make the SL grade; how does removing a huge chunk of its development pathway (foodchain) help that? Slimming down to what is available is simply reaching for the lowest denominator - if we're doing that lets have £100k per club and operate a £400k salary cap - and wait for the game to die a painful death.
The Championhip Clubs are just as vital to the game and its pathway as the Community Clubs and the Super League clubs. The game simply isn't strong enough to cull them.