I dont think that just be naming the Regional colleges as IITs will have any effect on the quality of students coming there and hence graduating from these institutes.
What make IITs stand apart is its entrance procedure called the JEE through which hardly 3 thousands students are selected.
By increasing the number of IITs would just devalue the existing IITs a bit.
But yes if the governemnt can ensure the large amount of costs that will have to be incurred to develop the infrastructure then it might be possible that over the years the new IITs can come off age and be anywhere near the existing IITs.
