That could be a good idea and I would love to see BBC launching their own BBC Wales channel as a competitor to S4C, as it would show programmes in English and Welsh.
There's one problem with this, S4C is loosely affiliated with the BBC, the BBC provides them with free programming and also the fact it's partly funded by the licence fee as well as the UK government, to an extent S4C is basically "BBC Cymru". I don't think there's a market for another channel in Welsh. Being completely in Welsh, S4C is barely surviving as it is, it was in a better state when Channel 4 gave their programming for free (although in English) for their analogue feed as Channel 4 wasn't available in Wales until the Digital era.
BBC/S4C strategic agreement
How the BBC and S4C will work in partnership over the next 10 years to deliver services for the benefit of Welsh-speaking audiences
www.bbc.co.uk