dalter, I understand that the real life selection committee does not use margin of victory. But in HD, I don't necessarily think we should be trying to mimic exactly what the real life committee does. I think the primary objective in HD should be to try to get the best teams into the tournament and seeded properly.
And that gets into a philosophical argument about what type of rating system is best. There's no doubt in my mind that a margin of victory system will most accurately tell you who the best teams are. A non margin of victory system is better for telling you what teams have accomplished the most, but not necessarily who's better. They are two very different things.
My concern is that if you use a non margin of victory system, you're going to end up with scenarios like you have now, where worse-seeded teams are actually better than the higher-seeded teams they draw in the 1st round.
As to your concern about margin of victory systems favoring uptempo teams over slowdown teams, there are ways to compensate for that. You can base your system on % of points scored instead of point differential, or even if you do use point differential, you can set it up to have diminishing returns as the margin of victory gets higher.