Actually, currently, P5 schools lose money on the other schools in college football. The D0, in my mind, is not so much about California, as it is about evening out the chances of all the P5 schools. Right now you have to pay to play all these low level schools, which for a lot of P5 schools really does eat into profits. Additionally, in the current structure, the SEC for instance might play FCS teams and then fewer conference foes. This makes an uneven playing field for the BIG 12 or PAC 12 or what have you. So if you want a more even shot at one of the big 4 slots, you have to either pay out more money to play an extra low level school, or get the SEC to play an extra conference game. It's a bit more complex than that, because for instance OSU has plenty of money, but the conference won't let them play an additional cupcake. But you get the idea.

Now I'd bet a lot of the AD's would never actually admit it, but D0 is probably an attempt to tilt the scales in their direction by eliminating these, and other, structural impediments to their own success.