I agree OSU and Michigan are the two best teams. There fore, when they play one another, one has to lose. Losing by 3 points doesn't necessarily make the team, "overrated". IMO USC has one more win to get to really have an argument, and the loss to Oregon St. is why.
Ratings are dumb in my opinion. Maybe it's just college football. I hate that as soon as a team loses once, they spend the season proving themselves. If they lose late in the year, ohwell, no time to prove yourselves. Better luck next year. Some teams will even go undefeated and still get no respect because of who they play. This is why March Madness is so special. There are actually equal chances for all. If there was December Madness, I can just imagine awesome it could be.