I like the insulation the D3/D2/D1 structure gives. Consider:
-- If D1 is all that exists, what's to stop the first-time player from popping in, offering booster gifts left and right in an attempt to land the stud players. If I fail..oh well...I'll pick up some other team and try again until I succeed. We hear people on the forums now who say they'll drop teams rather than live with the consequences if they get caught for booster gifts and that's after they've presumably had to work up to D1. There'd be little disincentive to NOT try them if you could jump straight into D1.
-- Being able to start immediately in D1 means I don't have to think about the future. Maybe I want to screw around and see what a team of 12 point guards can do. I pop in, recruit to that desire, lose miserably and leave, sticking the next owner to clean up my experimental mess. Or I could blow my recruiting bankroll going after all the elite recruits. If I miss, oh well, I'll just change teams and try again at a different program next year. Since D1 is both the entry level and the pinnacle level, there's no "demotion" possible to work as a check and balance against extreme behavior.
-- In a D1-only world, how do firings work? Clearly, if I ante up for a 10-pack and then run Duke into the ground with 1-26, 0-27, 0-27 via my incompetence, you're not going to fire me and refund seven seasons of cash. HD may have a messed up business model, but even they aren't THAT messed up.
-- We all hate ghost-shipped teams. I don't think that's a phenomenon that D1 has to worry about very often at the present. I'm sure it's probably happened, but I don't think I've ever heard an instance of it. If D1 is all there is though, then those folks who buy multiple seasons and decide they don't like the game/don't have time for the game....those teams are now running rudderless.
If you're going after a genuine feel for D1, none of these are good for the overall game.