My interpretation is that by allowing teams to keep only 10 players and throwing all other players back into the draft pool for a new draft you would in effect be conducting a reallocation draft and forcing all teams to reallocate.

I believe that a forced reallocation draft is a bad idea for the same reasons that contracting leagues is a bad idea. Teams that have worked hard to build a core group of players (either veterans that can win or prospects that can win in a couple years) and are just getting ready to be competitive would be upset if they lost half of the players on their teams.

If you want to stack the deck by giving the weakest teams in a league more picks in the reallocation drafts then that is reasonable..... but PLEASE DO NOT FORCE REALLOCATION on any teams. Let the good teams keep the teams they have built... even if it means they get ZERO picks in the Contraction draft.

[i.e. I would rather get nothing out of a contraction draft than to throw Roberto Alomar, Tom Glavine, Ken Griffey, and Rob Nen into the reallocation draft].

In addition to the above comments ...

Reallocation drafts can be dangerous anyway and must only be conducted if sufficient safeguards are in place. A few years ago I saw a team purposely dismantle a team by trading all the good players for draft picks. When I asked what was going on I found out he was hoping to restock his team from a reallocation draft and then use all of the picks to supplement his reallocated team. As it turned out there was no reallocation draft that year and that team ended up being a very poor team, which the owner abandoned a couple years later. My point is that if proper safeguards are not in place the trades made in anticipation of a reallocation draft can do more damage to competitive balance than any other single action I have seen.