The current state of Magic

[H]

Are bad cards even necessary for a good draft format? They are only skill testing insofar as being used once, then forever being relegated to the draft chaff bin. High powered draft formats like masters sets have cards that may be weak in limited but are very strong in constructed, and from what I gather people love playing those sets because of how powerful they are. The extreme example of this is cube, which many consider to be the pinnacle of limited magic. Instead of having dead cards that essentially only trick newbies into playing them, every card is powerful and it is up to the deck builder to create the cohesive list that makes it all work, like creating an all star team. To me, this is far more interesting to play (and watch if it is streamed) than traditional limited which is the equivalent of play fighting with foam swords. The only rationale I can come up with is that they intentionally want draft to be super low powered because it is a limiting factor in game play which makes it simpler and easier for newbies to pick up.

In theory? No, bad cards are not needed. In fact, the existence of Cube as a format is proof of this. Which is why I directly point out that the only real plausible explanation of why such completely unplayable cards exist actually has nothing to do with some fabled "skill testing" or any abstract concept like that and is simply a pragmatic solution to both put out more cards, which speaks to your later point, while making the burden on design and balance teams far lighter.

Then there is a monetary aspect. For every crappy card that they put in a set, they are essentially wasting a slot that could be used for a good card. This limits the amount of good cards in a set which causes the value in the set to pool in those few cards. The most egregious example of this is mythic rares, where a couple of them are going to be the strongest cards the set, constructed staples that everyone wants, and the others are dollar bin cards that they put at mythic for 'flavor' reasons or something silly like that. Nobody even cracks boxes anymore since so much of the value in the set is concentrated in a couple cards that you might not even get, and there is not a single person on the face of the earth that enjoys cracking one of the worthless mythics in their box, they are probably the ultimate feel bad in pack cracking.

Right, opening packs/boxes is almost always going to be net-negative EV, unless you can open enough to overcome the "randomness" of the distribution. Even then, it is probably a net loss if you are paying retail prices for boxes/packs. In this way, Wizards does indeed cater to the Scalper/Business/Collector segments. You can see every set's EV here. Notice how the only real outlier is Modern Masters 1. Ixalan's value does "buck the trend" but is likely to decease once the sets are no longer in Standard.

So, to circle back around, the point of these worthless cards is specifically to limited EV. "Skill testing" is a bogus, farcical construct made up only to lighten the Design and Balance load and most importantly negatively impact the EV of the average pack in order to promote the selling of more boxes/cases.