Ok, perhaps not a complete fraud, but certainly not (IMHO) a deserving #1 in the college football rankings. How could an undefeated team be a fraud you ask?
To start, lets look at their schedule. Of their 10 opponents, only 4 even have winning records. This results in an opponents percentage of only 0.518 even with the losses to Alabama factored out. Further, Alabama's out of conference schedule was Clemson (4-5), Tulane (2-7), Western Kentucky (2-8), and Arkansas State (4-5).
Compare this with the opponents winning percentages for the other undefeated teams and Alabama falls behind Texas Tech (0.602) and Utah (0.576) and only ahead of Boise State (0.468) and Ball State (0.387). At least Utah went out of conference against Oregon State (6-3) and Boise State against Oregon (7-3). Alabama's opponents winning percentage also falls behind 1-loss contenders Texas (0.693), Florida (0.610), Southern California (0.539), and Oklahoma (0.539). So they clearly haven't played the toughest schedule and if someone like Southern Cal is going to get dinged for a weak schedule it would seem that Alabama should too.
But a team shouldn't be penalized for having a poor schedule if they soundly defeat the poor teams and do play well in their games against better teams. And this is where Alabama falls down a bit. In a home game, they only beat a 2-7 Tulane team by 14, they eked out a 3 point win again at home against Kentucky, and eked out another 4 point win again at home against Mississippi. Their two significant wins are against Georgia by 11 and a weaker than normal LSU by 6. And Georgia got walloped by 39 and LSU by 30 against Florida, and LSU, at home, was able to beat a 3-6 Mississippi State by only 10 and Georgia was able to beat Kentucky by only 4. So, Alabama isn't soundly defeating some not so good teams and their only 2 significant wins were not that impressive.
Compare this again with their undefeated competition and you see Texas Tech soundly defeating all their poor opponents (closest win 16, others in 20's and above) and has beat a 1-loss Texas in a close game, walloped an 8-2 Oklahoma State by 36, and a 6-4 Kansas by 42. Similarly 1-loss Oklahoma, Texas, and Southern Cal, and Florida have clearly handled poor competition and aside from their 1 loss each, good competition as well.
Now of course, those 1-loss teams have, well, 1 loss, so doesn't Alabama staying unblemished trump these other failings? To a degree yes, but clearly there is a point where it doesn't (see Utah, Boise State, and Ball State) so why should Alabama be any different? I think it is clear that based on the data one can't justifiably put Alabama ahead of Texas Tech but using the same logic as is used for not putting Utah or Boise State ahead of Oklahoma, Florida, Texas, and Southern Cal one could argue Alabama shouldn't be ahead of them either.
For an objective look at who should be ranked where, see my computer ratings which have Texas Tech #1 but some surprises after that.
Now, thankfully time will tell, especially with Alabama having to face Florida in the SEC Championship, so either my skepticism will be proven right or Alabama will have the opportunity to show they deserve a BCS championship game berth. Of course, they have two more poor/average teams to reinforce my analysis above before that (3-6 Mississippi State and 5-5 Auburn).