With a cap system, I doubt any team, GM or coach would be foolish enough to waste any money for rank & file players for multi-year contracts with anywhere near the 1 million mark, since there would be plenty of those kind of guys available every year, not to mention new, younger (and better? cheaper?) players. You ink the few marquee players you can get for the majority of your payroll, and shuffle the supporting cast around every year.
No point keeping those failures around, instead a team who did poorly can free cap room by ditching undeperformers every year (even more easily and cheaply if buyouts are lowered) and try to lure away valuable asset from a competitor if they don't have cap room or at least force their hand to pay more for their top player, thus limiting their options. And this would happen every year, so lower tier players would seem to suffer financially.
But apparently Bettman and his cohorts have realised this too (and realizing that thus they would never be able to persuade the lower paid players to accept the cap), and now they are harboring the idea, that teams would be forced to have a payroll structure, where only a limited amount (%) of salaries would be allowed to be paid for the top earners.
As for the subject of the thread, in a league were the already too widely spread top talent would be dilluted even more amongst the teams, sure it would make the league more competitive, with more mediocre teams. If already by today's standards a team can be considered "great" if it has 2 good scoring lines, when those teams are broken down because of cap, all it means it that the talent of the great players is more and more wasted with poor team mates, like Lemieux or Gretzky with their early years linemates.
Since the systems (read trap) are more important today, referees let go with too much hooking & obstruction, huge goalie equipment, it's not unreasonable to expect that under the cap system every team will have 1-2 players, some maybe 3, within points for the scoring title (alltogether dozens of players within few points), and all the teams would be within 4 or 5 wins away from each other.
Sure it would appear to be competitive, but is this really what the fans want, just that even the most incompetent GM and owner would make money or at least break even, and that the big-market owners would cash in hugely. Instead of few players maybe being overpaid under the old CBA with the owners approval.
Howabout with higher standard of play, concentrating that talent on fewer teams?