Yes, absolutely. I think it's a win-win situation for everyone involved.
There are, what?, 7 Canadian teams now? So, that's perfect -- put all 7 into one division.
Since the new (old) playoff format is for inter-divisional play first, it guarantees a couple of rounds of Canadian teams in the playoffs, which guarantees huge fan satisfaction in Canada and consistent revenue in the most reliable market.
It also increases the chance (no certainty, of course) of a regular Canadian vs. US-team in the Final, which would also generate a lot of interest.
I also think the NHL would be happy with no Canadian teams playing US-based teams in the first couple of playoff rounds -- it's easier for them to sell Arizona vs. L.A. than Arizona vs. Winnipeg, a city Arizona-people have never heard of.
Travel in the Canadian division? No problem for the western cities and Winnipeg. Van, Edmonton, and Calgary already have the worst possible travel in the League, so it's no worse and probably easier since they don't have to deal with border-crossing as much and can just hop on and off domestic flights.
The only hitch in this plan might be the travel schedule for Montreal, Toronto, and Ottawa. I can see where they might reject it on the basis of their actually having to travel as much as the western teams, something they've never done. But I still think most players and nearly all fans of those teams would rather watch them play against Vancouver and Calgary than watch them play against Buffalo, Tampa, and Florida. Montreal would have fewer games against Detroit and Boston, which might seem slightly negative as well.
But basically, I think it would be brilliant! Bring it on!