In terms of lack of talent, I don't think the issue is with the players talents. Really, the difference between the 200th best player vs. the 300th best player in the league is minimal, as compared to the best player in the league (Lebron) vs. the 100th best player in the league, or even the 10th best player in the league. So shrinking down the number of teams will not really help immensely.
The issue with more teams is the spread in talent from a coaching and management perspective. You only need a one or two of these guys to make a good team, and there simply aren't 30 of them in the league right now. Some of those GMs and coaches are just horrible and do not deserve a job. They simply got it because there are 30 teams and every team needs one.

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