Ben, I'm inclined to agree with your argument that UM, even with a loss to OSU, would still be the 2nd best team in the nation. However, traditionally, when you lose, you drop at least one spot in the polls, and usually more than that. So, even if UM is the 2nd best team, tradition would dictate that they fall out of that #2 spot in the polls, which then, in all likelihood, would remove them from the #2 spot in the BCS. Not to say that it's fair, it's just the way it usually is. Again, like I said, I'm inclined to agree with you - UM even with a loss is probably more impressive as a team than the other teams with one loss that are front-runners for the second slot in the championship game - ND (who they destroyed), USC (who's looked relatively average this year), and Florida (who has been fairly unimpressive).
Also, I'll reiterate, it just wouldn't be fair for the loser of the UM/OSU game to turn around and win the national championship after being beaten just a few weeks before by the same team.
Personally, I'd love to play ND, USC, or Florida. I'd like to play ND six or seven times a year if we could - they're so fucking overrated it's priceless. ND's defense could actually be WORSE this year, if that's possible. USC is a shell of their former selves, and I'd like nothing more that to hand them a beat down. And Florida, well, I'd love to show what a very fast, very athletic BIG TEN team is capable of doing to the best of the high-and-mighty SEC.