While I would agree that there is more demand for football than is presently available with 32 teams, I cannot see how this would work either.
The XFL came and went faster than anything. They had A LOT of hype surrounding it and it's gimmicks (race to centerfield for the ball, etc), and they couldn't make a go of it because it just cannot compete with what the NFL has built.
Playing with second rate players just doesn't draw a crowd. Like the XFL, CFL, or Arena League, once a player shows any glimpse or flashes of potential there gone to the NFL to make more money. This league would be no different.