My personal preference is to keep baseline prestige as a strong component in the game. Like it or not, in this day and age, the Big 6 conferences have major structural advantages over everyone else, and that's simply part of the challenge that mid-major programs have to deal with... bigger alumni/booster networks, larger athletic department revenues and budgets (due in large part to football), substantially more TV and media exposure, better facilities, providing players the opportunity to play with and against the best competition, etc. Given all that, it will be extraordinarily difficult for a non-Big 6 program, let alone entire conference, to crack this monopoly. Sure, there will always be 1 or 2 schools that can do it for an extended period of time, but they are rare exceptions, and still can't be considered elites. Butler may have made the title game in back-to-back seasons, but they still aren't out-recruiting Indiana, who has been largely irrelevant for several years.
IMO, any college basketball dynasty game that is at least semi-related to real life should try to replicate the above landscape to at least some degree. Any game that allows Coastal Carolina to become as good as UNC with a few good seasons just departs too far from reality for my taste. In my view, the major conference teams should always have some built-in advantages over the mid-and-low majors.
All that said, I believe it should be easier for the mid-majors to compete than is currently the case. I think this is primarily a recruit generation problem, as opposed to a baseline prestige problem. However, I might be open to lessening the importance of baseline prestige slightly, but not drastically. Furthermore, if we are going to have floating baselines, then they should move glacially slow... in my view a 10-season rolling average is way too short a period of time. Lots of programs have burst onto the national stage for several years, only to fade away when the coach who rose them to prominence departed (UNLV and UMass to name a couple... granted, they had probation issues, but so did Kansas, Kentucky and Syracuse in roughly the same time periods, and none of those programs were crippled). Despite several years of success, they did not really alter the school's true baseline.
Staying consistent with that, one additional possibility to consider would be to make it a bit easier (or eliminate the caps) for mid-major schools to increase their current prestige, without touching their underlying baseline.