When the poker machine tax started to bite Leagues clubs, NRL clubs needed to cut costs. It was easier to put $50K into a Toyota Cup team than $500K into a NSW Cup team. I don't see the ARL putting $500K to each of the 16 clubs to field a NSW Cup team, but the ARL have offered to subsidise travel and accomodation costs for NSW Cup teams when they travel interstate or to NZ.
However, what can be done is to reorganise the open age grades into 3 tiers:
1. NRL Telstra Premiership
2. Australian Cup/NRL 2/NRL Championship (NSW Cup rebranded)
3. NSW Bundaberg Shield & Qld Cup
A rebranded NSW Cup would be a new second tier underpinning the NRL, and this new national competition could provide a genuine pathway to teams that want to prove their credentials to play in the NRL. The 11 NSW Cup teams could be joined by the following 4 Qld Cup and 1 Metro Cup team to create a feeder team for the Broncos, Cowboys, Gold Coast, Manly and Canberra. This would be a 16 team competition, and could be played over 22 rounds:
11 NSW Cup teams
Sunshine Coast
Northern Pride (Cowboys)
Tweed Heads (Titans)
Ipswich Jets (Broncos) and
WA Reds (Canberra)
Newcastle would not have a feeder team, but at the moment they are using the Newcastle RL, and are under financial pressure, so there is room to include a feeder team for them in future.
The QLD Cup would become an 8 team competition of mostly Brisbane clubs, but they could play each other home and away, and an extra round, making up 21 rounds.