Australia just doesn't have the money or population for this kind of comp to work.
That's way too simplistic.
Assuming that it's got the right business partners and support from broadcasters and/or streaming services, I have no doubt that a national second division RL competition (or Aussie Rules for that matter) could be a more successful product than some other sports.
I'd back, e.g., North Sydney Bears vs Wynnum Manly to both out rate and out draw the Macarthur Bulls vs CC Mariners or Illawarra Hawks vs Brisbane Bullets for example, or any programs that broadcaster are putting on TV before the footy on a weekend, assuming that the competition they are playing in has a good structure and is promoted well.
But that's just the problem; even if you ignore the fact that the NRL is notoriously anti-entrepreneurial, and that such a competition would be expensive to set up and take time to bare fruit, I highly doubt that they have it in them to structure it properly or promote it well. They'd insist on the NRL clubs fielding teams in it for example, which would be instant death of the competition as a commercial product, because people would be primed to treat it as a poor man's NRL instead of it's own unique thing.
Also, despite ample evidence of well run lower tiers being highly successful in other nations (soccer pyramids for example), the media in this country seems to be convinced that there's no interest in anything other than the top tier when it comes to sport. So that'd be another hurdle.