I agree that owners would be uninterested in joining a league and then finding out they are in the second tier; it is a very un-American way to do sporting business.
When it comes to television, rapid expansion and thus a further dilution of the talent pool, would seem to work opposite of generating ratings, which typically rely on big stars and big teams. Isn't the La Liga TV contract, like Real and Barcelona get 90% of the cash and the other teams split up the remaining 10%? I suppose the more local markets you are in the more likely you are to attract fans in those markets to games, but I'm not sure they will deliver the real ratings boost the league is looking for.
Expansion doesn't hurt the quality of play like it does with the NFL, MLB, etc. because MLS is just one small part of a giant global player pool. Since MLS isn't among the very best leagues, there is ample opportunity to go out into the global market and find additional foreigners who can come in and ensure the level of play is maintained. Because per-team spending has increased considerably in the last five years, most would argue that the level of play has increased even as the number of teams has grown.
If MLS is somehow able to approach the level of the biggest leagues one day, having so many teams might be viewed as diluting the player pool of the league, but that's a "we'll cross that bridge when we come to it" problem.
The percentage of minutes that are going to American players has declined from around 50% in the old days to about 44.5% in 2017 to about 38.5% last year. The overall number of minutes is close to the same, though, it's just that the same number of Americans are spread out across more teams.
As far as TV ratings go, I'll say this: if you have a surefire way of improving the situation, give MLS a call and ask to pitch your ideas. They'll do anything to boost ratings. One problem the league faces is that individual clubs have grown fanbases, but the average MLS fan is more "team-centric" than the average fan of other major sports leagues. People watch their team, but it's been hard to build a national audience for national broadcasts. The league's hope is that having a presence in more large markets will engage with more fans, who will then tune into national broadcasts. MLS went a long stretch without any presence south of DC or east of Houston. By 2022, there will be five clubs in the South.
The other problem is that MLS is a niche of a niche. Soccer isn't the most popular sport in America (though it's rising up the ranks), but there are still plenty of fans. The problem is that fandom in the US is highly balkanized. Obviously, the EPL is considerably more popular than MLS. Additionally, there's the parallel universe of Hispanic fans who follow clubs from the old country, including and especially Liga MX. As I often like to point out, if you judge by TV ratings the most popular league in the US is Liga MX and the most popular soccer team is the Mexican National Team.
It's a lot easier to convert an EPL or Liga MX fan into an MLS fan than a non-soccer fan, so the league has some work to do on that front. Anecdotally, this board has always been fairly England-centric, but it does seem like interest in various components of the world of American soccer has grown over the years. It's a slow process, because it's obviously true that MLS does not approach the level of play in the EPL. On the bright side, the level of play here has improved slowly but steadily, and other aspects of the game like the stadium experience and TV presentation have also gotten better. 15 years ago, most MLS teams were still tenants playing in cavernous environments in NFL stadia. (Local factors apply: I suspect there'd be more MLS chatter here if this were a Seattle Mariners fan board....the Revs are trending up in certain ways but historically haven't made it easy to be a fan.)