I doubt there would be streaming only. At the very least it seems like the CW is in bed with the PAC. Not the best network, but it is at least a channel that nearly everyone already gets.
The good part about Netflix is that nearly everyone already has it. So it will be available for fans. Netflix may not be ready for big time live TV, but I think they are at least good enough for regional level/streaming broadcasts.
The competition factor is a legit concern for being on a platform like that. But many people are using streaming services for their TV already. I use Hulu for instance. It tailors the experience to you, so if you are a known UNLV fan it will suggest live sports. It may not capture casual fans/streaming users, but with so many cutting the cord on traditional cable/satellite that will be a bit of an issue regardless of who you partner with.
Personally I don't see Netflix getting into the business this way. I don't think it would be worth it to them, unless they do what ESPN plus( and the MWN) does and just utilize local equipment and "talent" to do all of the heavy lifting. The PAC does have some of this infrastructure already, which is what the CW used last year. Not sure if both Netflix AND the CW could use the same infrastructure simultaneously.
But I think Netflix would be better than Apple TV for instance.