They did get ruined in the lottery a few times and then they started to pick for specific player archetypes rather than pure talent. Marco Kasper, Nate Danielson and Michael Brandsegg-Nygard are all great little players but none of them are lifting the skill ceiling of their franchise.
On top of that, Yzerman rushed to sign veterans off UFA which raised the floor of his team and now they don't have enough elite talent through the draft and are strangled by some bad contracts for bad vets who are doing enough to keep them out of the bottom 5 but not enough to bring them to the playoffs.
He's bungled it pretty hard. For all the caution stories of the Sabres/Sens, people don't talk enough about how the Red Wings is an example of trying to get out of a rebuild too quickly by artificially raising your floor could be just as, if not more, detrimental.