In some ways, I favour the free market, sink-or-swim approach: it's a risk based judgement. Most promoted teams come straight back down anyway.
However, the risk of this is that it creates a situation where 17 PL teams are pretty much safe from relegation, spending their £££ on good players, knowing that the teams coming up may well be cautious about spending, and so become cannon fodder on promotion.
Although, that's kind of happening now (see Norwich)