Is it though? All of Aus' other major sporting leagues (NRL, netball, basketball, soccer), apart from cricket and AFL, have a Kiwi team.
I'd argue that the biggest issue isn't the competition's format, rather the lack of competitiveness against NZ teams. If Aus teams were stomping all over the Kiwis week in week out no doubt engagement would be greater. Not disagreeing with you that removing the kiwis as a means to an end for competitiveness and less-predictable outcomes might be the better option, however.