So the Big 12 has all these teams fighting it out with 1 loss, all still alive for the playoffs.  How did they go about doing that?

Basically, it seems they hit low hanging BCS level fruit, and in Baylor's case even less, and got a lot of their teams to 4-0/5-0.  At that point, the rankings take over and "looks we have 5/6 teams in the top 25 battling it out."  

In the Big 12, I have TCU as good, KSU as good, OU pretty good, WVU as upset specialists and fringe top 25, with Baylor still not having a road top 25 win in like 3 years

I would take MSU/OSU/Nebraska/Wisky against the top of the Big 12 and feel pretty good about it, and I don't have much faith in the B1G, including OSU haha