I agree with Mark, a league structure of some kind is overdue. FIFA and the confederations have been very slow in doing anything about turning "prestige" friendlies into something more competitive (at least in a nominal organizational format) and more marketable, which is odd becuase it is surely in their financial interests to do so.
Regarding new tournaments, a new "official" tournament which involves only cherry-picked teams will not necessarily be popular with the majority of member FAs unless they all receive a contribution from the proceeds. Although the executive committee can come up with random crap at any moment, of course.
But the real issue with any new tournament is simply the finances. It would need to guarantee good crowd attendance and TV viewing figures, without diluting the calendar and also avoiding a clash with other major sporting events, particularly football.
Matt's idea is a sort of second tier Confederations Cup, with some big names (and Wales) thrown in to make up the numbers. Equivalently it can be considered as just the "Top-16 Playoffs" of the rankings with a proviso that at least one team from each confederation must be involved (this at least means that the rankings themselves are used as a sort of qualifying stage, so in theory it is open to all members rather than pure cherry-picking).
But given that the Confederations Cup is supposed to be for the "best" team from each region, the new idea seems a redundant extra version of it. Why not just add your next best 8 teams into the existing Confed Cup, and strengthen that instead of making a sideshow?
Another variant would be to have more than one team from each confederation, a sort of Champions League for national teams. Say 16 teams drawn from the top of the rankings with unspecified confederation partition of 4+3+3+2+2+1(+1 host)=16. This is basically a smaller extra World Cup.
We will call it the Sir Piet Veroeveren World Rankings Cup
For example, using current FIFA rankings (for a laugh), here are the top 4 ranking positions for each confederation, and in bold the qualified 16 positions:
CONMEBOL : 1 2 4 5 (Brazil, Argentina, Chile, Colombia)
UEFA : 3 6 7 8 (Germany, France, Belgium)
CONCACAF : 16 20 23 57 (Mexico, Costa Rica, USA)
CAF : 19 30 33 35 (Egypt, Senegal)
AFC : 28 43 44 50 (Iran, South Korea)
OFC : 112 153 156 165 (New Zealand)
Host : presumably Luxembourg
Obviously the allocations can be tweaked, and indeed there could be byes for all the continental champions so that aspect of the present Confederations Cup could be retained instead of using just the rankings.
In the example above the differences would be that Portugal qualify instead of Belgium, Cameroon instead of Senegal, and Australia instead of South Korea.> FIFA Challenge Cup for 16 lowest teams
Most of us international football nerds would love this, but we are not the main market. Again this is not financially sensible.
Crowds and TV interest will be absolute zero (see AFC Solidarity Cup). It can only be done if it is agreed a priori to run at a financial loss.
But, a similar concept could be a lower division of the international league such as Mark mentioned. In this case the league as a whole could be financially viable, with the top level profits spread to cover the costs of the lower levels.
The danger with a multi-level league like that would be that strong/weak members are treated differently. In FIFA, every member FA has the same "power" politically, in theory. But not financially of course.