Each of a school's teams should be allowed to compete at the level most appropriate for them and in the conference that makes the most sense. putting every team in to the same division and conference just because are the same school is nonsense.
Until they moved all their sports to D-1, Dayton played D-1 b-ball and D-3 in all others. The small Ohio schools they played in D-3 felt that it was unfair because the money that Dayton made from b-ball help fund facilities at the school that were impossible for them to match. They were going to join with a bunch of D-1 schools at the NCAA convention one year to sponsor an "all sports in one division" resolution that was eventually changed to require anyone playing D-1 b-ball to have all their sports in D-1.