As a previous poster brought up, contraction would probably be a good thing for the league. It won't happen though because like other posters said, it's unfair to the teams being removed.
I actually think a solution would be to significantly increase the max salary limits for a player (potentially remove them altogether). Realistically this won't happen because the large base of players in the union are the mid-to-lower end that will vote no, but this is a great way to even the playing field.
Think about it... today the Heat dominate because they have 2 potentially top 5 players at near max contracts. Other teams have max contract players who are out of the top 10. CLEARLY the Heat have the best deal since you'd rather have a Lebron at max than a Amare (just using Amare as an example, feel free to put anyone else in like Joe Johnson). This creates super-teams that significantly unbalance the game.
In a world where there is no max, someone would offer Wade or Lebron $10M (random number I'm throwing out there) MORE per year. It'd be hard for them to turn down the money so they wouldn't be able to team up together with Bosh.
This is all hypothetical --- clearly you'd need to change the bird rights, luxury tax, cap rules etc... but I think it's an interesting thought. You'd have a lot more teams with 1 superstar and a bunch of role players and a much more competitive league.