I think that the easy answer is actually 3 teams. AF, CSU and Wyoming. AF should go independent like all the other military academies. CSU and Wyoming are simply never going to compete in the MWC against the top players of BYU, Utah and TCU in football. They also don't compete very well in basketball against UNLV, BYU, Utah and SDSU. I know that it all comes down to money, but being in the WAC would probably be good for CSU and Wyoming. I think they would be able to be very competitive and their fans would enjoy winning.
I would trade the WAC those two schools for Boise State and Fresno State. Then I would add SMU to replace AF. I really think that would be a great conference with BYU, Boise St., Utah, TCU and Fresno State being perennial contenders to not only be ranked but be in the top 25. Adding SMU would renew a rivalry with TCU and expand into Texas without getting too spread out. I also firmly believe that SMU is a program on the rise that has a strong football tradition and is committed to winning.
And if the MWC has rules about kicking people out then lets just dissolve the conference completely and then create the conference that I suggested with another name.