Indeed, Townsend feels the Whites are big enough to be a top-flight side but has criticised the way in which the Yorkshire club are run.
Leeds lost 1-0 at Watford in the FA Cup on Saturday afternoon - and Townsend told the BBC: "They are a fabulous club, a Premier League club that sometimes has the mentality of a Sunday morning one."
With Leeds now out of the FA Cup, only league football remains for United for yet another season.
However, with Leeds 16th in the Championship, even league action may be hollow and meaningless before the summer.
Leeds are 11 points clear of the relegation zone so should be relatively safe yet are a good 16 points off the play-off places.
If Steve Evans targets a top-half finish, the United squad may have something to play for. Queens Park Rangers are 12th but only have three points more than Leeds.