Here is my personal answer, $10 million is really about $3 million lump sum after taxes, which while would be a nice chunk of change, it would not be life altering for me. Sure it would help out, but afterward we would still live in the same house, day to day life would be much the same, maybe buy a new car or two, but that is about it. By contrast $500 million is $175 million lump sum after taxes, which is life altering, that is private jet and vacation house on a private beach kind of money.
As to being a tax on the dumb, I see it as entertainment / stress relief, for the price of a candy bar, you get to dream of a chance, though a very slim chance of getting life altering amounts of money.
Having said all that it looks like Powerball is up to almost $93 million for tonight, ($31 million lump sum after tax) which is getting into that life altering range, maybe not enough to afford owning a private jet, but certainly enough to rent one for travel.