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Lots of major cities, like St. Louis, can't get a Hobby League because of inept local stores.
Except the answer to this isn't reinstating PTOs, but allowing player groups to run HLs.
The problem with using PTOs was that since they themselves were typically store owners, they dictated who could run events in their "local" area based more on eliminating their own competition rather than who would post the larger numbers for events.
Also, if there used to be a PTO for your area, it's likely that whatever store they were based out of would at least run HL, so I don't see how City Champs being at a HL level would screw over local players any more or less than using PTOs would.
The PTO for St. Louis was Pastimes in Chicago. They used to send judges here for events, plus they had the level 2 judge who used to live here (now lives in Normal, IL) run almost all of the events himself when attendance started to drop. I am on their judge list as well although I always play instead of judge when it comes to VS if I can.
The only store left in St. Louis that has some VS players is going through a name change and they don't seem to be in a hurry to get HL going. I ask the asst. manager (Phenom 1 from the WoW 1-70 podcast on WoWRealms) all the time and it's always "We're working on it." I'd rather have Pastimes run stuff than not to have anything available at all, which is where St. Louis VS and even WoW is at right now.