And Picard could well have become Commodore at that point, dramatically speaking. An officer of that rank commanding a prominent starship would fit Trek continuity, and it would restore the by that time already lost dynamic wherein Riker was the doer and Picard was the thinker. As "doing" now consisted mostly of sitting in the command chair and thinking up clever ways to make a bottle show look exciting (as opposed to doing heroic legwork on a silly planetside set), Riker would need the slight adjustment in position to remain a driving force.
They could have kept the XO vs Captain dynamic even if Riker were now the Captain and Picard were the resident flag officer there for the ride. All the better excuse to have Picard do all sorts of diplomatic meetings at the rate he did after "BoBW", while doing relatively little otherwise. But then we would have missed Picard's rebirth as the Action Captain, the Vash stuff and so forth.