First, Bama/PSU isn't getting 20 million viewers, especially up against the NFL.
Second, if you go to 14, and the top 2 receive a bye, while still having the top 5 conferences get an AQ, these are the matchups:
#3 Texas vs. #14 Clemson
#4 Penn State vs. #13 Miami
#5 Notre Dame vs. #12 Arizona State
#6 Ohio State vs. #11 Alabama
#7 Tennessee vs. #10 SMU
#8 Indiana vs. #9 Boise State
Obviously OSU vs. Bama would do great. But none of those games jump off the screen saying ratings bonanza. That's my point, the additional matchups in the 1st round, aren't going to produce amazing ratings.
You're right, I don't know if and how much ESPN is losing. I am assuming they were worried about it because they sublicensed all those games to TNT to recoup the amount they paid to broadcast them.