As a lifelong fan of baseball I am comfortable with the system we have in place. I have only recently heard of this system as used by soccer. While I understand the concept, I believe the gap between established teams and those in the minor leagues now would make this move impossible.
The established major league cities also have major league size stadiums for their teams to play in. Minor league cities on a whole do not focus the financial commitment or the supporting businesses to make the proposition work.
Also, the "have nots" of baseball change pretty rapidly, showing that once a loser always a loser is not always true. The four teams in the final rounds of the play off were from what is considered small market towns.