Like most, I agree that we are about 1.5-2 players away from being true contenders, along with the development of our existing youth. Think Indiana the year before they signed David West.
The real question is: Would you rather build around what we have, or dump the guys we have, and go all in on the lotto this year?
It is obvious that we are not bad enough to be a lock for a top three pick (and sometimes being the worst does not even guarantee this; see Celts 97 Lotto and Celts 2007 Lotto). Hypothetically, the only way to almost guarantee a high pick would be to trade away Rondo and Green for picks or expiring contracts. Say you end up with one of the top guys. History has shown (unless it is Bird/Magic/Duncan) that it take 3-4 years for top tier talent to bring their teams to contender status, and that is assuming a lot of things go right. You would be hoping you win the lotto, that the player you pick pans out, and that they pan out at a level better than what Rondo and Green already provide you, and that you are able to build around them. That is a lot of what ifs to count on. As you can tell, I do not agree with the you must bottom out in order to be good scenario, particularly not with our current team.
So, I would choose route two. Continue to develop our young talent as we are doing. Allow green and rondo to grow as leaders of the team. Maybe you make the playoffs as a 5-8 seed, maybe you end up as a back end lotto team with a small chance of winning the lotto. Worst case, you are ending up with a pick in the 12-16 range, plus a first rounder from brooklyn/atlanta this year and brooklyn's in future years (they might just do the tanking for us). With those pieces and our young assets, I would feel confident that Danny could make something happen. Sure, you may need to trade one or two of our young guns (Olynyk, Sully, Bradley, Green, etc.) to get a high caliber player in return, or maybe those guys and our lotto picks develop and we just need to add our David West to take them over the top. I like my odds with this option much better. Plus its a lot more fun to watch.