Why should it be like that? It just gives you a shit competition that's easier to win and less people are interested in.
The idea that the european cup was better when it was the champions of every country is a complete nonsense, and you only need to look at the routes to the finals of old competitions to know that.
If the aim is to find the best team in Europe, then excluding 80% of the best teams in the world is complete idiocy.
You either have the CL roughly as it is today, or you have a mini tournament like the Club world cup, between the English, Spanish, French, German, Italian & Portuguese champions.