I generally think expanding the pool of nominees beyond 4 (potentially) makes for a winner without significant support. Small but fervent factions could determine awards. Ideally, I would favor an "instant runoff" form of ranked balloting, but I don't think that's in the cards.
It is very unfortunate, if you are an artist or producer or fan of show, to have your show open in a year when there is a plethora of strong competition. But there is no predicting or preventing that. Most shows have gestation periods of years. When beginning the journey, you have no idea when (or if) you will land on Broadway, let alone who else will. And there will always be the possibility of last-minute transfers from off-Broadway (think 1996; no one a year earlier would have suspected that the hottest 2 tickets in town would be transfers from non-profits).
I feel for the performers who get nominated in the "wrong" years. The amazingly talented Rebecca Luker has been unfortunate to get nominated against heavy competition for her 3 nominations. In other years I think she would have won walking away.
But that's show biz, kids. Some people and shows that seem deserving will fail to either get nominated or to win, when in different circumstances they almost certainly would.