I really hate cupcake games.
From a purely competitive standpoint, they are are a disgrace. Teams only get to play 12-14 games a year, a small number of times to test themselves and prove how good they truly are, and when they play teams they have a 99% chance of beating we don't learn anything about them. I'm not saying that everyone should fill their schedules with USC's, Texas's, and LSU's, especially if they're not even sniffing .500 on a yearly basis. Optimally, teams should schedule among their peers since it maximizes competition. There's no way a team like Florida should ever schedule I-AA Charleston Southern, or Ohio State should schedule Toledo, or Texas Tech should schedule North Dakota AND Rice. That's not competition, it's a massacre.
Sure, once in a blue moon a team loses to a cupcake, and we're able to drop them like a hot potato, but those times are few and far between. The vast majority of the time, games against cupcakes waste an opportunity to really see how a team stacks up against their peers. And since teams play so few games, we need all the info we can get to rank teams in a credible way.
Of course not helping the rankings isn't the only competitive reason to hate cupcake games. We don't just watch football to see who's going to win, we watch for the all the on-the-field competitive aspects like the excitement, the battles, the mind games, the plays, the fakes, the back and forth. When was the last time you watched a game against a cupcake and weren't certain than your team was going to pull out the W the whole time? Kinda takes the fun out of it, doesn't it? And when you do win, it's not a very quality high. Not like beating a rival, or a top 25 team, or a solid non-conference foe. Nobody thumps their chest about beating PoDunk U or Directional State. It's a rip-off for the players, coaches, and fans. And it's embarrassing and unhelpful for the cupcake.
If good competition were the only objective, here's what we could do - combine all of the weak I-A conferences and some of the stronger I-AA conferences and make a new division. Call it Division I-a, I-B, whatever you want. Mandate that all college football teams play all of their games within their own division, preferably against teams of similar stature. We'd have more opportunities to see how good the top I-A teams are, and the non-BCS teams would actually have a shot at a national championship. (Sure it'd be the I-a or I-B championship, but that doesn't matter - do you ever hear the Division I-AA, II, or III teams complaining about their championships or saying that they're meaningless? No.) Lotsa problems solved.
But that's from a purely competition perspective.
The truth is that competition's twin, money, plays just as big of a role and is the main reason that cupcake games work. As much as they skew the competitive landscape, they do balance a lot of financial things out.
From an institutional money perspective, cupcake games serve their purpose at all levels of play. Even if it means teams' attendance at that cupcake game will be 10-20% lower and that they'll have to shell out hundreds of thousands of dollars to secure said cupcake's participation, the win is usually makes it worthwhile. For the powerhouses, they're trying to make it to the BCS bowls where the payout is huge - easy wins are nice, but not losing is better. For the middling teams, getting bowl eligible is the key. Even in an era with 30+ bowl games, not making it to one hurts the bottom line. Sure you might not make any money on actually attending the bowl game, if it's a small payout and you incur some high expenses during your time away from campus. But you've got an extra few weeks to practice, an extra game to learn from, and you're probably gonna get an attendance boost at least in your first home game the following season.
For the cupcakes themselves, while it might be competitively embarrassing to get pasted 70-3, it's better than not playing at all. A lot of schools and teams rely on the income from cupcake games to fund not just their own football team but their athletics programs in general. Traveling to a powerhouse's stadium for a game has become a lucrative business, with cupcakes demanding (and receiving) more and more each year. Some teams have earned as much as one million dollars for agreeing to be have their asses handed to them by a powerhouse. That's at the high end, but hundreds of thousands of dollars is the norm nowadays.
So if we do the math, let's say the average payout is between $300,000-$500,000 per cupcake (and I'd bet that's a conservative estimate). The number of games vs I-AA teams has been rising steadily to a high of 94 this year. That puts teams' payouts at between $30-50 million per year. A bit staggering, isn't it? So of the $20 million or so that BCS conferences rake per year because of BCS games, they turn around and give probably $5-8 million of it to non-BCS teams. (If the BCS conference commissioners were so inclined, they could publicize the hell out of that fact, showing that while non-BCS teams don't receive as much money from the BCS directly, they receive a lot more than people think indirectly. It would probably bolster their position that the BCS is good for football in general and at least quell some of the screaming from the lower levels about how they get the monetary shaft.)
We all know cupcakes are a huge roadblock on the path to quality competition. But their curse is that they do have their financial upsides for all parties involved and keep smaller programs afloat. As much as I hate them, I know we have to live with them.