To me, it seems like the NBA got it right at first when they first started with the lottery, made good improvements, and then made it much worse.
'85, All 9 lottery teams had an equal shot of selecting #1-#9. Worst team could pick 9th. Discourages tanking, but could also keep bad teams down with bad luck in the lottery.
'87, the NBA adjusted it, so now only picks #1-3 were selected via the lottery, all the rest were in reverse order of finish (as it is today). But all lottery teams still had an equal shot of #1. Probably a step in the right direction, still discourages tanking, but bad teams can't drop too much.
'90, the weighted system. There's now 11 lottery teams. Worst team has 11 chances, 2nd worst team has 10 chances, 3rd worst team has 9 chances...,11th worst team (best team to miss the playoffs) gets only 1 chance. Now the bad teams have a little more help with the odds, but not enough to really encourage tanking.
'94, because Orlando won the lottery back-to-back in '92 (with 21 wins, 2nd worst record) and '93 (41 wins, missed the playoffs on a tie breaker), the NBA decided Orlando's 1.5% odds of winning the lottery after barely missing the playoffs was just too great, which brings us to the system we have now, which basically does exactly what it set out not to do. Encourage tanking!
Because apparently, Orlando winning back-to-back lotteries and challenging the Bulls for the most popular team in the NBA was somehow bad for the league. Didn't stop the league from pimping Shaq and Penny like the current Heat though.
I think the systems from ’87-‘93 were the best. The worst team can drop no more than 3 spots. And adding small weights in ’90 was probably good too, enough to help the bad teams, but not enough to encourage tanking. Basically there’s only about 1% better odds between picks in that old system. Old system, the difference in odds between the 1st and 6th/7th pick, is about the same as the current system’s difference between 1st and 2nd pick, about 5%. I wonder which system would encourage tanking more?
Unfortunately I doubt the NBA would ever go back to a pre-1994 system. But I think that system was the best way to do it.