If you take even a couple of seconds to think about the best rebuilding plan, the best path to choose is obvious.
1) Try to extend the winning culture that was created during the Robinson/Duncan Era. Sure, the playoff streak is over but if the franchise continues to value winning, continuity, character, togetherness, etc, that culture can continue even during lulls. The Heat and to a lesser extent the Jazz are good examples of this path. You keep trying to win while remaining flexible and keeping the culture intact.
2) You burn the franchise down to the ground and start over. While the franchise is smoldering for ~5 years, you hope that the high lottery picks that you ac ulate are good enough to rebuild your franchise.
Even if you prefer the second path for whatever reasons, that's a path you can take at any point between now and the end of time. It's never too late to strike a match and burn it all down. Conversely, the first path is only available for a limited amount of time. If given a choice, the first path is obviously the way to go. I mean, sure, it may not end up working and you may end up on the second path regardless, but it'd be unwise to not at least give it a shot.