This is true, and I think the best of both worlds is achieved with a Trans-Tasman (potentially plus Asia) competition or conference, including our 5 existing teams, that makes up the bulk of our domestic season.
But if this isn't possible would it be better for rugby in the long term if we went back to 3 or 4 teams in a long form cross-continental super rugby tournament similar to Super 12, or to make a radical change and work on building a new mostly domestic competition that we control and where we can have teams in all the major markets that we want to build the game in? As you say this would clearly mean lower salaries, at least initially and we'd probably have to do away with our Wallabies eligibility criteria. But it's arguable that this will happen anyway at some point because the difference between the salaries in Europe and the salaries here continues to widen.
If we did this we'd no longer have truly world class domestic teams, but they'd still likely be pretty high standard, the salaries on offer would be enough to retain very good local players and attract others from overseas, including test players. It's not like there's unlimited space for players in the top European competitions. And more importantly we'd provide much more content locally and have a greater presence in more markets. Because we'd no longer be focused on providing the optimal test rugby selection trial it could be a longer competition too, closer in length to the NRL, AFL and A League.