Popularity has nothing to do with it. Look at sports like Baseball and American football. Leagues like MLB and NFL are among the richest in the world. Let's have a 4-month window for the IPL, so that it generates the maximum revenues. The remaining 8 months can be provided to other franchise leagues, ICC tournaments and bilateral tours. At this point, the IPL is much more profitable than any of the other options. So ideally the ICC should allow it to expand. I would suggest a 20-team tournament spanning over 4 months.
But you are ignoring one key factor, the IPL is BCCI and Indian government centric its not a neutral entity like ICC. They have banned complete Pakistan from IPL and also threats anyone who don't follow what they say. Even Aussies don't sledge Kohli and other Indian players anymore in order to secure there contracts. 4 months for IPL players need one month of rest also. So there is not much for ICC events and other leagues.