I like it the way it is. I really think combining all schools will kill some D2 programs, some (in certain areas of the state) will be placed in a district where they would very rarely have a chance at a winning record, much less a playoff berth.
And I'm not going to look it up, but exactly how many 1 or 2 win teams made the playoffs this season (in either division)? I honestly don't know. I will be willing to bet there aren't very many. I know there are several 2A-6A teams that make the playoffs with 1 or 2 wins (even a couple with no wins), and they use the system you want to use. Not sure that's a good argument.