How about all of the above? You have to remember that the death of BOTH the PAC12 & the B12 would create a massive revenue vacuum for sports rights. A ton of money would then be available for the B1G's rights. CBS currently has no premiere rights to CFB after losing the SEC's Tier 1 deal to ESPN.
If CFB morphs into a true AFC/NFC mini-NFL style league, the B1G has to respond to this move by the SEC or tOSU/UM probably eventually leave and join the SEC super league. If the membership of the B1G want to become the Ivy League 2.0 eventually, that's fine. Doing nothing at this juncture is exactly where that leads.
The SEC will eventually kill the ACC to continue growing its membership IMO, that will include UNC/UVA/FSU/Clemson IMO. If I were the B1G commissioner, my first step would be to grab:
USC
UCLA
Oregon
Washington
Secure those four first, then go to Notre Dame and make the following pitch: the SEC is likely to demo the ACC at some point and that they better either join the B1G/PAC now or plan to join and compete in the SEC later as the only Yankee school in that conference. Let us know if you think that you're a better fit in a conference that brands itself as being truly national - from the Atlantic to the Pacific (the new B20), or if you fit better with a bunch of schools from just the south? If the latter, good luck to you, and the B1G's only play is to add two more from the PAC12.
If ND gets on board, you have one spot left - I think you go to Texas and ask them if they've made their mind up for sure or not. They likely have, but I think you need to at least offer them spot #20. If they say no, then you ask the 19 members who they want as #20, probably from the P12.
If everyone wants to eventually submit to the SEC, then doing nothing eventually ends up there. The B1G is the only conference that's positioned to create something that could compete with it, even without UT at #20, that's a conference that will compete for playoff spots year in and year out.
If the B1G executes the above plan, it creates a pretty competitive landing spot for ISU with the remnants of the P12 & B12 teaming up together in a 4th super conference. The B1G adding ISU or Kansas at this point is the same as telling tOSU to go to the SEC, it needs to make a huge counter punch to the SEC grabbing UT/OU.
I think going big and swinging for the fences is certainly something the Big 10 is considering. However, due to ACC GoR I think that's going to be a really heavy lift.
But you are correct that the Big 10 is going to run into a problem with OSU, but it's probably a lot more feasible and easier to accept an uneven revenue sharing model rather than try to use expansion as a sole means to keep OSU happy financially. Simply put, you aren't going to expand your way using an even distribution to make significantly more money, if any without absolutely hitting it out of the park in terms of poaching. And they may run into the requirement to expand for media inventory, so they don't have the luxury to stay at 14. We don't know yet.
But people need to give up this idea that they are going to only expand if a team is worth an extra $50M on a TV contract because 1. No one will be, 2. They may not have a choice, and 3. They can and will probably have a different set of contracts and model in a few years, which may include uneven distribution. So...
Adding Oregon and USC would increase the total media contracts value by $X. Adding ISU and KU would increase the total media contracts value by $Y.
But it's not as simple as $X>$Y. The fact is KU and ISU are probably going to be far more willing to forgo money than any of the PAC members, certainly a USC or Oregon. The ACC GoR is such that Clemson or ND probably couldn't forgo anything from the Big 10.