[Aerkuld]

I was wondering about this earlier this morning. Am I wrong in thinking that the crux of the problem, and the reason that the Fed felt the need to bail out AIG, was that they had simply got too big and were involved in too many other companies and industries for the whole company to just collapse without serious repercussions?
If that is the case then wouldn't it make sense for the federal government to break the company up into smaller independent divisions?
What would be the pros and cons of such an action?