I think you have a stronger case at 60%, tec. Taking 8 teams out of the pool is a big concession - taking 3, including one that (?) didn't have any openings at rollover - is minimal.
As for the larger issue, my first HBD experience was in sandlot, since contracted. I'm leaving one league (Puckett) for another (Ron Cey), keeping my team level at 4. I am searching out leagues with a high level of competitive balance (as I define it), commitment to the active management of minor leagues, and strict anti-tanking guidelines. After figuring things out, I now know what I want from my HBD experience. And, as a consumer, I'm gonna do anything I deem necessary to my enjoyment of the product. I feel bad, sometimes, for losing the chance to compete with owners in my old leagues. But I lose no sleep over it. When sandlot did not fill and no one recruited for it, it was time to leave.
Contraction works. Having standards and rules helps differentiate "the product" and supply currently exceeds demand. If a league is open for more than a month, it should be given a "5 day notice" that it has to fill or it'll be contracted. All league participants on that 5th day will retain their rosters, but not historical stats, and be put into the "open pool". Once there are 32 teams in the open pool, they'll be grouped in a new world, starting "year one".
If a league cannot fill in 35 calendar days, it does not deserve to live. Keep the customers with one and two teams playing the game.