They're useful for lower age cities, and for some quests, and that's about it. I suspect it's a deliberate point for some rewards to be minimally exciting. If there's no risk of "loosing", the lottery becomes less exciting. It also helps reduce the probability of higher value rewards, which is necessary to prevent them from disturbing the balance of the game. In other words, no lousy rewards also means no great rewards.
Another issue is whether a lottery belongs in a strategy game.