I think the perception of this division would ultimately hurt Iowa. I don't see any teams from the B12 North thriving in their current situation. What it does IMHO is give teams like Kansas, KSU ect small windows of opportunity that weren't as available before. That's about it.
In this scenario, the B10 East division would immediately become media darlings and the B10 West would be the also ran. The addition of Nebraska, ND, Texas ( I believe none of which will ever happen) would help Iowa as it would allow for a confrence alignment with some notable power. As tough as Iowa and Wisconsin can be, they do not have enough history to carry a division by themselves in terms of respect.
Iowa is much better off competing against the current B10 than they would this allignment IMHO.