No. I've seen this idea before, on and off for the last five years in fact. It's no better now than it was the first time I saw it. It's too complicated for the average fan to follow, it destroys rivalries and doesn't allow others to develop, and it would further bury struggling franchises who are already finding it hard to compete with bigger markets. Not to mention free agency would make this idea a complete and total fustercluck.  

This would NOT dilute the talent pool, it would CONSOLIDATE it! All of the best talent would play on the top fifteen teams, rather than having the talent spread over 30 teams, as it is now. In the English Premiership, all of the best players play on Chelsea, Manchester United, and a handfull of other teams, with less attention paid to the lower level teams. What you would see is a dramatic increase in the talent level among the teams in the top league, a level of play similar to the weaker MLB teams at the middle level but more competetive from game to game, and a something similar to the current AAA level of play now at the lowest level - and because many of these teams would be the current AAA franchises anyway, their fans would not even notice. This idea would be not unlike contracting the worst 10 MLB teams, except with the idea of expanding MLB market share rather than shrinking it. Only the teams from the top league would compete for the World Series Championship. The lower level teams would be competing to advance to the high league to compete for the World Series next season, or to keep out of the lower league. This would force owners to do all they could to field the best possible team, because if they didn't, next year's schedule would include the Toledo Mud Hens instead of the NY Yankees. Not good for attendance! It would also prevent owners of weak team from dumping all of their best talent toward the end of the season, sense doing so could mean an end-of-year losing streak and likely relegation. Again, games against Toldeo instead of New York next season. Also, at the end of the season, attendance figures would rise because games between teams with losing records would actually mean something - possible relegation. Again, Toledo or New York? Teams would become more financially stable as payrolls at the lower levels would remain reasonable, while attendance could increase because instead of Cincinnati or Pittsburgh being 25 games behind St Louis in August, they would be in a pennent (and promotion) race with Indianapolis. Obviously the existing minor league structure would need to be reorganized, AAA franchises would no longer develop talent for the MLB. Many existing AAA franchises have attendance figure not much different than the lower drawing MLB franchises - Portland, Sacramento, Columbus, Rochester, Norfolk, and Indianapolis have all outdrawn Kansas City or Montreal in the past. Many of the AAA teams with strong fan support would soon find themselves competetive with many of the weaker MLB franchise both on the field and in the financial books. This is a great idea, but the owners would never go for it - they would rather lose money. This would also probably work better using only the 30 existing MLB franchises (plus 2 new teams) in a two 16-team league format, as Ignatius J Reilly said.

If MLB has anything right, it is the AL and the NL. Three 20 league teams? No way. Divisions and wildcards are just fine the way they are.

As stated previously it would dilute the talent, and you have to ask the question of whether or not there is a market for the extra teams. Certain cities struggle to attract fans as it is. The Oakland A's, a consistently strong team, consistently has an empty stadium.

This would not be a bad idea, but I don't think you could ever get the owners to agree to this. They wouldn't want the chance of their team falling down a rank, when they are already on top. This also wouldn't work with the current farm system that baseball has. If Columbus was the best AAA team, then would they want to send their players up to the Yankees, and risk losing a chance to get to the top tier. They wouldn't, but the Yankees wouldn't care. AAA right now is a JV, and the players have a chance to make the varsity. However a AAA team right now will always be AAA, and will never get its chance to play with the big boys.

Way to water down the talent some more.

I fail to see what this accomplishes, besides changing the major leagues into a much more water down product, kind of a "super-minor" league. Would also have the effect of killing or damaging a lot of minor league franchises, which are one of the charms of the game. I'll pass on this one.