The poll options are terrible.
Denver clearly has a non-zero chance of winning the Super Bowl with Peyton Manning under center. Anyone who says it is literally impossible for them to win with Peyton is just being obtuse. A phenomenal defense managed to drag *TRENT DILFER* to the title, so even if you think Manning is terrible, there's still a greater than zero chance that the Broncos defense goes all 2000 Baltimore Ravens on the field.
At the same time, the next-smallest option, (25%), requires us to assume the Broncos have a 63% chance to win all three of their potential playoff games. And that seems high. I'd install them as solid underdogs against any of Carolina, Arizona, or Seattle in the Super Bowl. I'd say they're probably an even bet against New England, thanks to home-field advantage. They should be favored in the divisional round, but certainly not by enough to make their total championship odds 25%.
Football Outsiders has Denver's Super Bowl odds at 12.6%, which seems totally reasonable, (and places them at fourth behind the three NFC teams I mentioned). That's what you'd expect if Denver were a toss-up in every game, (or if, like my hypothetical, you think they're a favorite in the divisional round, a toss-up in the AFCCG, and an underdog in the Super Bowl). Maybe I shade those odds a hair lower down to 10% or a hair higher up to 15%, but then we're just splitting hairs. Either way, the right answer isn't anywhere close to any of the possible choices.
I went with 25%, and I would have done so even if I'd estimated Denver's title chances as low as 2%. The difference between 2% and 25% is a quantity error. One suggests a small chance, while the other suggests a very, very small chance. The difference between 2% and 0%, on the other hand, is a category error. One suggests "possible", while the other suggests "literally impossible". And no matter Peyton's "true" title odds, as I said, anyone who says it's literally impossible is deliberately being obtuse. Or else they have a pitiable understanding of the true breadth and scope of human possibility.
Edit: Vegas has Denver at 6/1 to win the Super Bowl, which is right in line with where Football Outsiders has them.
Your discussion is interesting but significantly flawed on nearly every level.
Firstly, you can get a 25% probability to get to the Super Bowl in an infinite number of ways. For instance, 100% in Divisional, 100% in Conference Championship and 25% in the Super Bowl. Or 75% in Divisional, 75% in Conference Championship and 45% in the Super Bowl.
Additionally you don't speak at all about the fact that the Broncos beat Cincinnati and New England while losing to Pittsburgh with Osweiler behind center. They split against Kansas City with Manning; losing in Manning's horrible outing. Houston is the only team in the AFC playoffs who they didn't face. How does Denver stack up at home against these folks?
I think that Denver could beat all 5 AFC teams.
Kansas City - 50% chance [smith, suspect running game, suspect passing game other than Maclin, strong Defense]
Pittsburgh - 66% chance [suspect running game, suspect Defense]
Cincinnati - 75% chance [McCarron, suspect running game, suspect Defense]
New England - 75% chance [suspect running game, no protection for Brady, suspect Defense]
Houston - 75% chance [Hoyer, suspect running game, suspect passing game other than Hopkins, strong Defense]
The Broncos also beat the entire NFC North including the two playoff teams [Minnesota and Green Bay].
I think that Denver could beat all 5 NFC teams.
Seattle - 25%[suspect running game]
Carolina - 40%[suspect running game, suspect receiving corp]
Arizona - 50% [Palmer, suspect Defense without HoneyBear]
Minnesota - 80% [bridgewater, health of Peterson, suspect receiving corp, mediocre Defense]
Green Bay - 80% [suspect protection for Rodgers, suspect receiving corp, mediocre Defense]
Washington - 80% [Cousins, mediocre rushing attack, horrible Defense]
So their best case probability for winning the Super Bowl would be 45%, while their worst case would be 8%.