I think it is pretty clear that the main competition that the players you are picking your test side from has to be world class.
Whilst it would be better having 5 teams playing in that competition than 3 or 4, I think it is the standard of the comp more than the number of teams playing that matters.
Our biggest issue at the moment is not the number of teams we have to pick from it's that they're not very good relative to our competitors. We have one good team.
Indeed. Perhaps the gravest error of unthinking hubris and dangerously poor strategic policy in Aust rugby's recent history was the JO'N-fed notion that 'Aust rugby must have a national footprint' and 'the quantity of pro rugby played each week matters or is a high priority' (even at the expense of quality of team and playing outcomes).
So we proceeded to invest in and insist upon opening franchises in WA and VIC that have clearly proven to be financially and fan-base-wise unsustainable. Further, we just established them, plonked them down, we did not carefully ensure the managerial and coaching calibre was there in all respects to ensure these teams became seriously competitive (in the way the NRL did so convincingly with the Storm).
We know the rest.
What we must do now is radically shrink the no of pro teams down _
to the level whereby we are sure we have the standard of management and good-to-excellent levels of competent coaching (general and technical) so as to be reasonably confident these remaining teams can be built to a sound quality of playing capability_. That is, where the quantity of players and teams is carefully balanced with the requisite quality of holistic developmental capability.
The notion that we design a new comp around some fictionally ideal no of teams is thus recklessly fallacious for 2020+ Australian pro rugby. We must chose a no of pro teams solely on the basis of the 'quality first, quality-led' principle and then expand only when we have the proven broadly-based results to do so safely, but that time is now many years away.