Is there a way to quickly convert a Group to a Sub-layer in Illustrator?
Select highlight all items in group and from the layers palette menu choose collect in new layer. This will eliminate the group (since it has no descendants) and make a new sublayer.
Image 1: Collect in new layer
Since this is easily recordable so you can bind it into an action that does this for you. So you could easily make a hotkey for this.
It is also possible to make a script that does this. No need to make a new file.