Would Saxony have a chance with a different Napoleonic War?
I think Saxony's chances were badly crimped by its history of getting stomped on by Prussia, and its proximity to that neighbour. It can't expand east, north, or south by much without coming upo against bigger powers, and it could still be seen as a threat by Berlin. Bavaria, on the other hand, could credibly gain strong influence in all of the Catholic south all the way to the non-Prussian Rhine valley (if Prussia does not get the entire Rheinprovinz, even further north). THe Austrians are often too distracted, and the French might well see Bavarian domination there as perferable to Prussian, assuming they are in a position to affect the distribution (i.e. we aren't talking 1814/15).
Come to think of it, if the king were game, Bavaria would make an excellent French ally in the region.
Of course, my favourite scenario is a strong Hanover (including the Rhine/Ruhr) and a powerful Baden (controlling Franconia and Wurttemberg) dividing the Western half of Germany, but that ain't gonna happen.