There's some truth to what Alvarez is saying. Once the ACC added Pitt and Syracuse and potentially ND for football, Penn State made the most sense as the 16th team. Imagine one division of Penn State, Pitt, Syracuse, BC, Maryland, ND, Miami, and VT and the other division of Florida State, Clemson, GT, UNC, Duke, Virginia, Wake Forest, and NC State. Kind of the old Eastern independents in one division and the old ACC in the other. This would have made everybody in the ACC happy.
Now imagine that you played 7 division games and two rotating crossover teams. Six teams would have permanent crossover rivals: Virginia Tech/Virginia, ND/GT, Miami/FSU to keep traditional rivalries around.
ND would play BC, GT, Pitt, Penn St., Miami, Maryland, Virginia Tech, and Syracuse every year plus one other ACC school. This would allow them to play USC and Navy every year and rotate Stanford, Michigan, Michigan St., Purdue, and other teams for the last game. Seems workable.
As for the financials, who knows if Penn State could have left the Big 10. But the ACC would have been a better conference than the Big 10, Big 12, and Pac 12 in football and the top basketball conference.