I think a better solution would be the "split" system that was implemented in Scottish football for a few seasons. Basically, you go through about 3/4th of the season and then split the teams into two tiers that only play each other, the 1st tier competing for the championship and the 2nd competing to avoid relegation.
You could adopt this to the NBA (sans relegation, of course) as follows:
1. split the league 20-10 64 games into the season. (Lets call these League A and League B
2. League A teams would play each other League A team in their conference twice to jockey for playoff seeding
3. League B teams get their records reset and play each other League B team twice with the winner of League B getting the #1 draft pick, and the remainder of the picks being assigned according to finishing position.
The numbers may need a bit of tweaking but I think it would be a lot of fun. You'd create more of the big team v. big team national TV matchups while giving the bad teams something to play for. You also solve the problem of teams making the playoffs by beating up crap teams like the 76rs late in the season.
Would eliminate tanking and make those last few throwaway games of the regular season more interesting.
This is still going in the Scottish Premiership, and is actually only really there as a poorly contrived solution to the problem of a 12 team league either playing each other twice - 24 games, too few - or four times - 48 games, too many.
It would work a lot better in the NBA as a way of determining the higher draft picks.
I don't think relegation would work in the NBA under the current 30 team format. However, I don't buy the argument that relegation would have the devastating consequences that it sometimes does in European football, because the whole set-up is different.
This is a very extreme example, but my home town team, Portsmouth, were in the top division of English football and winning the FA Cup just 6 years ago, but they were there due to paying wages far in excess of their income. After being passed through a handful of owners, most with criminal/money laundering connections and one of whom may not have even existed, and suffering numerous relegations and penalties, they were finally bought by a fan-owned and backed consortium. Despite this they nearly went out of the bottom tier of the Football League altogether this year.
There are too many checks and balances (salary cap etc.) in the NBA for this to happen in the event of relegation.