It's the right motivation but the wrong solution.
The problem with the Oscars isn't how many films get nominated for best picture -- it's what kind. As I'm hardly the first to note, Academy voters have a number of obvious biases that make it easy to game the system. Foreign accents, period settings, stories of triumph over disability, anything involving the Holocaust -- all demonstrably improve a movie's chance of getting the nod. That's how films like The Reader and The Curious Case of Benjamin Button made it into best-picture contention this year despite making a splash with neither critics nor audiences.
Creating five extra slots should allow more box-office favorites like The Dark Knight to secure nominations -- but it will also invite more turgid, self-important Oscar-bait like Babel and Crash.
Perhaps it would be better if the Academy were to take a page from the Hollywood Foreign Press Association and divide the best picture category into two: not comedy/musical and drama, as the Golden Globes does it, but "Best Picture: Popular" and "Best Picture: Important."
The former would allow voters to acknowledge the films that people actually saw and liked in a given year; the latter would allow them to continue feeling smart and virtuous.