There are multiple problems with that approach though. Serious problems.
with as many talented screenwriters as there are, there have to be good scripts that go unoptioned.
Sure, but can you spot them? Are you capable of spotting a right script which would make a good profitable movie? Or do you know someone who can? Check out http://blcklst.com/
Cast talented character and stage actors instead of big name (big $$) star talent
Stage acting and film acting are two different disciplines. Vastly different in technique and experience needed. Another point here is that 'big star' talent brings marketing power to the table as well, something you haven't touched upon on at all. Marketing is big part of the game. That's why usually in 'smaller' productions you get a lead or co-star 'big name' with rest of the cast relatively unknown. Not everyone unknown. Not to mention casting is a difficult job in itself. You may find an actor that suits role perfectly, but all of the cast has to function together on screen as well.
Think $15-20 million budgets
$20m range falls in small production range, so that checks out. Productions are not spending happy, remember that when you see those vertigo inducing budgets. They have thought through their spending well.
The idea is to have a deep catalog that quitely does well, instead of trying for massive blockbusters that can be $200m losses if they bomb.
Why not both? That's what studios do. http://en.wikipedia.org/wiki/Tent-pole_(entertainment) Otherwise you'd better have deep pockets in order to churn out multiple films and 'hope' some of them will rake in cash. That's because most of the films on smaller budgets aren't profitable at all. It's a numbers game in your proposal then, more risky than tent pole approach. What you propose would be a YC for films, where budgets aren't $10k because they can't be for various reasons and production time isn't two months, but two years.