The real problem with the LSU/OU/USC debacle is that the selecting teams for the MNC under the current system is all about perception, and if the media/coaches select the two best teams as conscensus #1/#2, there is no need for a complicated BCS formula. It was designed for one purpose, and that was to settle which 2 teams would be playing for all the marbles if the polls couldn't decide it. In that year, all the polls agreed that OU wasn't in the top 2, yet they applied the 'tie-breaking' formula anyway. It never should have been applied in that particular situation, and then LSU and USC would have played and the winner would have been percieved to have been the best team. No one outside of Oklahoma believed OU deserved to be there, so there wouldn't have been any controversy when they were left out.
An yes, put me in the corner with those who have proposed that the reason the bowl system still exists is because half of the teams get to end their season on a high note for recruiting and pride etc. I'm not saying it is right, but it is one of the arguments. The Bowl season is an exhibition tournament, not a championship tournament where the winner is the only one left standing. That's why JoePa refused to play Texas in the Cotton Bowl so many years ago. He had nothing to gain by playing another heavyweight contender in an exhibition game (but that didn't give him the right to piss and moan when the perception was that Texas was the better team after all the games were played). Somehow, it's evolved into a cluge of a championship tournament and the round peg isn't fitting the square hole.