There's a big difference between what you spend and what you get. Evaluation of talent is a big factor. The Knicks have a huge payroll, but the players they have aren't worth it. They suck at evaluating talent, which is why they continue to fail. Note that all the scribes continually pick NY to win the Atlantic, based on their inability to evaluate talent and chemistry.
This is one of the big reasons why teams like the Yankees don't win every year. Spending all the extra money gives them a big advantage, but it isn't always enough.
The salary cap has made the NBA more competitive, and it also causes teams problems. One of the reasons, that the Lakers AREN'T a dynasty, in my book, is that their teams don't win year after year like the Bulls and the Celtics did. Your latest version, the Shaq and Kobe show was cut short, mroe than anything else by the lack of character of the players. The immature me first attitude of Shaq and Kobe led to the Lakers not getting a dyasty. They also paid too much for those two, killing their chances of attracting enough players to support Batman and Robin.
These days in the NBA, two stars and a bunch of decent role players is all it takes to win a championship. There isn't as much good talent as there are teams in the league. In the old days, it was much, much harder to assemble a good team, when you needed four or five top quality players and had to keep them together for years to achieve success. What the Celtics accomplished back then means so much more, because it was so much harder to do.
These days since it only takes two really good players, teams can often buy themselves a ring or two. That's not a dynasty, that's just mortageing your future. The Lakers got their rings, but now they only have one start, and they're not in the playoffs. Is it better than what the Sixers did, building a team only to fall short, and then struggle to start over, having thrown too much money at marginal players? I'd say so, but it sucks to be a Lakers fan these days- not much to look forward to.
Is Iverson worth what they pay him? Probably not- but he does play hard every night and would be a serious MVP candidate if the Sixers were a better team. I'd say for all he's given to the team, he's worth the money much more so than an Alan Houston, but not so much as a Shaq or Duncan.