how about this for an idea

change it to a super 8 and after each round the 2 fighters with the worst defeats are out?

round 1 - 4 winning fighers and 2 loosing fighters progress
round 2 - 3 winning fighters and 1 loosing fighter progress
round 3 - semis
round 4 - final

just as much action, less chance of it all going wrong

you could also have the excitement of a draw after each round?

as well the current system seems to have too much ambiguity about who is in or out