Divisions are almost always going to be a compromise. These divisions are set up to minimize out-of-time-zone games. I don't really see an issue withe the Central and Pacific divisions. The eastern divisions are a little weirder but I'm pretty sure that's a result of the fact that any realignment required a 3/4 vote of owners to approve. So, with 30 teams, any group of 8 could block a proposal. It's pretty well known that NYR, NYI, NJD, PIT, PHI, and WAS wanted to be in the same division. CBJ and DET wanted out of the west. I think those 8 teams might have teamed up to block any proposal that didn't accomplish those two goals.
Keeping the first playoff rounds within the division was an attempt to reduce playoff travel.