I guess it depends what your priorities are. If your aim is to put something on TV for fans and make money, then my plan is fine. If you actually have delusions that this is about respect for the game and meaningful competition, then you're right they should just cancel the entire season.
Your plan still isn't fine, really. Who's actually going to bother watching games without actual major league teams? Even the people who do tune in are probably going to turn it off after a few innings because a major league team against a B team would probably get pretty out of hand in short order. It's one thing for a team to have maybe a player who two who hasn't been actually playing any real baseball games, but I doubt that an entire team full of players who haven't played any actual baseball games in months is going to be particularly competitive.
Aside from that, there are the logistical issues. First and foremost is where are these alternate teams coming from? Teams only have 60 man pools to draw from, and those 60 man pools include injured players. They can't field two entire 30-man rosters (which is what the roster limit stands at right now), without even taking into account that the extra players they do have might not be able to fill the positions necessary to cover an actual baseball roster. So if they were to have alternate teams, they'd need to find other players who might not be in player shape, and even if they are, they still haven't played any baseball in months.
Even if teams did have alternate teams to sub in for them if they had positive tests, you'd still end up with cancelled games. The alternate teams would still have to travel to wherever they'd be needed. Sure, they might not have to sit out for multiple days, but you'd still have games cancelled.
Of course, if Major League Baseball were simply concerned with getting games played and willing to throw any competitive balance out the window, then there's no reason that the Blue Jays and Nationals would have been idle this weekend. They easily could have played each other for a few more games. Both teams were in Washington after all. But Major League Baseball was more interested in preserving the terrible unbalanced schedule they have for this season than having teams play games just for the sake of playing games.
Players are going to test positive. That's a foregone conclusion. Just wholesale canceling games in a sport where you're expected to play 6 games a week isn't sustainable and isn't going to work.
We are in agreement here. A Major League Baseball season, under these conditions, is not sustainable and is not going to work. Even a hub city/bubble approach would not have worked with a baseball season. While team outbreaks would not have necessarily been a foregone conclusion as they are now, the logistics of having one city host 5 major league baseball games a day would not have been feasible.