Because it would be impossible to regulate, impossible to implement fairly, and competitive balance would soon become a fairy tale. The have's would have 10x the advantage they already do over the have nots.
My question is how is that any different than what we see now, save for the recipient of the the money? Where is the 10x advantage? The rich boosters of the richest schools already drop huge money to the Universities, the richest universities almost always correlate to the best recruiting classes, highest paid coaches, and best facilities (which in turn correlates strongly to on-field success). So they direct some of that to the players directly instead of the athletic departments taking out a chunk for themselves?
If your primary concern appears is "competitive balance", I'd argue we're a ways away from that as it stands. So long as the best players are free to choose where they want to go to school (and surely nobody is suggesting we draft high school kids to attend specific universities), the competitive balance will always be skewed towards the richest universities that have the most resources. All we're doing now is just quibbling over whether some of that finance can be directed to the players directly rather than using the university as an intermediary and distributing what is essentially crumbs relative to overall revenue. I'm just not sure how that competitive balance can be accomplished short of some form of CBA with players implementing a salary cap, but as you said that would essentially make college football a professional minor league....which we both agree would kill the game.
To me it's very simple. If players are tired of the NCAA making money off them, then don't play. Period. Pay for college on your own, don't go to college, play minor league sports, start up a new league, do whatever the hell you want. But if you want to play NCAA sanctioned sports, play by NCAA rules.
It appears to me that this legislation's endgame appears to be to press the issue and influence the NCAA rules changing so that payers can get paid
and "play by the NCAA rules".