I've been a dealer artist only a few times (twice at PAW con, marketplace at FC, and dealer at BLFC most recently) so I'm still kind of new to dealing. I don't think I'd be able to give a really informed opinion on which method of choosing artists is best. Lottery and first come first serve aren't very appealing since they're too random, and I know a LOT of artists were unhappy with the jury thing FC did last year. I do like reading these kinds of journals though, since I like to see the more experienced dealer artists comment on the pluses and minuses of each system.

This is a really interesting question, I didn't realize that spots were so competitive that artists actually get turned down for space. I think a mix is best, possibly with some sort of a cool-down period so that a small group of artists doesn't monopolize things? Like, if you include as part of your ranked-application the number of times you've been selected consecutively up to that point? Give some favoritism to folks who haven't gotten a chance.