Larry only says that if Benson was speaking out of line. Which to me seems to confirm the speculation/rumor/belief that when Utah and Colorado were set up in the South division at the time the P12 was created, it was done so conditional on the stipulation that the California schools would be reunited into a single division if additional expansion occurred and Scott was pre-authorized to negotiate such an expansion. I don't necessarily blame Benson for speaking out, since public lobbying was probably the only way he could try to influence the situation, but you can clearly see Larry putting the kabosh on that.
As far as scheduling in a new P16, here are some things to consider.
Currently teams schedule OOC games for one of three reasons:
1) Body Bag games - helps maximize poll rankings by reducing the probability of a loss/downside
2) Challenge games - helps maximize poll rankings by having more potential upside
3) Rivalry games - ex. USC-ND, Florida-Florida State
Currently very few OOC games fall into category #3. But if 16 team super-conferences exist, a 1+1 playoff system will not be far behind. And once that exists, there is no need to engage in mid-season poll ranking management techniques. Which opens up the possibility for more OOC games of type #3. Weaker teams will still schedule Body Bag games to help them reach 6 wins and bowl eligibility - lower tier SEC teams do this already. But stronger teams would be able to establish rivalry games to help them in recruiting.
For instance, if Texas were in the P16, the most beneficial annual OOC opponent for them would be Miami or Florida State. This would allow them to counterattack into the SEC's recruiting base. Even more generally, there would be a strong move by some teams to schedule additional non-conference games with non-divisional rivals. Again this would be for recruiting purposes. For example in a P16, Texas would play one California team a year. It might want more exposure than that. Similarly California teams might want to play one of the Four Stooges teams more than once a year. Problem solved by scheduling a non-conference home and away. Or in Colorado's case, there really isn't anything preventing the Buffs from scheduling two OOC games a year with California teams, perhaps one a P16 non-conf game and one with a non-AQ Calif team such as Fresno State. The point is that once a 1+1 is established, all the 4x16 teams will have no problem getting exposure in their targeted recruiting markets - you have 3 free OOC games to accomplish that with.