If you could not place 8 in one room downtown, would you split one group downtown and one outside? Likely not. Nor would those whom cost matters more.
I simply want the rules to be followed and fair for everyone. The king room is NOT meant for your group. Your group should be in a room meant for it. If thats downtown, great. If its not, then that's fine too. What your group should not be allowed to do is take a room not designed for it. Maximum occupancy is there for a reason.
Groups that have cars often do split. (If Gen Con would run a usable shuttle, maybe everyone else would split too.)
When one of the 8 people in a group gets a lottery number good enough for a downtown king room (but not a double), then the room IS meant for that one person and it IS fair for him to claim it. He is then allowed to share it with a couple of friends. But the rest of the group should obey the maximum occupancy rules and find rooms elsewhere.
Most of the reasons I've seen for needing a downtown room (heavy books, needing a nap, unwieldy cosplay, etc.) could be satisfied by having one friend with a downtown room. You don't all need to sleep there.
As for fairness for lone attendees versus groups and draws in the lottery....meh. If you go by yourself, you will have a lesser chance of getting a downtown room versus a group of people who by badges separately. That isn't unfair. That is math. The solution isn't some impossible scheme to ration rooms based on actual real occupancy rates no one actually knows to make things fair for the single attendee
If a solo traveler takes a downtown in-block room, they are taking up space that could be used more efficiently by putting 4 people in the same room. But that solo has a considerably smaller chance than the group of 4 of scoring a downtown room.
Their lottery chances are not "fair" in the mathematical sense, but the tradeoff does seem "fair" in the more subjective sense of justness.