So I've always hated the idea of incentivizing losing and it happens in every American sports league, but particularly the NBA, where the draft means so much more because of how impactful a single player is on the game.
Tanking is basically a poison on competitive sports. It needs to be removed entirely.
European soccer doesn't have this problem thanks to not having a draft and having relegation.
On the other hand, European soccer is also completely dominated by a select few teams literally every single season almost entirely due to not having a draft to help even the talent out. So I don't think that's a great model either. We need to keep the draft to prevent these hegemonies where 1 or 2 teams win the title every single year.
I get the notion that you don't want the very best teams lucking into the very best draft prospects on a regular basis, so making the entire league have even odds seems like a not great idea.
So my compromise: Only the non-playoff teams are in the lottery, but all of them have the exact same odds. One ball in the hopper per team, you draw for the entire lottery, not just the top 3 picks.