No one (really) wants to see a N.C. State vs. Middle Tennessee championship game. Maybe, maybe, just maybe, they would once, but you're right. The sports need the 'villains' to make it interesting, and let's face it, they're not really villains. Bob Knight, that guy was a villain. UNC and Duke? Man...
The funny thing about royalty in the sport is that there's not really true royalty. Duke 'became' royalty. Michigan State is one or two championships under Izzo before they become that. UCLA was 'royalty' but they were so irrelevant for so long they were just a footnote.