Too many teams. Talent dilution is part of the problem, but the real problem is attention dilution. In a league with an already bloated regular season who's only outcome is playoff seeding and individual awards/stats, games need to be against relevant teams to drive fan interest. More teams means less rivalry games. I'm sorry, but I don't give a single shit about 70% of the Western Conference or half the Metro, but I'm going to tune in to the Leafs vs Bruins or any Canadian team every time I can. Adding more irrelevant teams makes more games irrelevant and dilutes the already slim narrative value of the regular season.
With this many teams, a necessary change will be to massively cut down on inter-divisional play. I don't care if that means Pittsburgh doesn't get to see Connor McDavid every year, I think that playing the Flyers and Caps 5 times a year is probably better for fan attention. The Leafs play the Habs just three times this year, it's an absolute travesty.
There's also the fact that this growth is completely un-organic is just the league getting deeper and deeper into the Ponzi Scheme. All bubbles burst, this one will be ugly when it does.