This is basically what I was trying to say in my OP. I 100% agree with this.
Just about Houston though. It's top 12, not top 8. But when researching, I also found this on the BCS site.
3. The champion of Conference USA, the Mid-American Conference, the Mountain West Conference, the Sun Belt Conference, or the Western Athletic Conference will earn an automatic berth in a BCS bowl game if either:
A. Such team is ranked in the top 12 of the final BCS Standings, or,
B. Such team is ranked in the top 16 of the final BCS Standings and its ranking in the final BCS Standings is higher than that of a champion of a conference that has an annual automatic berth in one of the BCS bowls.
Part B is the important part. This means that unless the Big East team moves ahead of Houston, which they won't, Houston just needs to finish inside the top 16.
Also, I just realized this, but Houston will have to play #22 USM in the C-USA championship game. That is another team they have to get by. This makes it much harder for Houston to get in, but if USM wins out and then beats Houston, they could potentially get a bid. And since the Big East is so awful, they'd only have to move into the top 16, which is very realistic. So the Big East being so awful could come back to royally screw Michigan if USM wins out.