It all depends on what you mean by "contender."
Las Vegas has the Nuggets at 40/1 to win the whole thing (per Sportsbook.com). If 40-to-1 equals contender status to you, then yes, Denver contends. As in, it is possible for the Nuggets to do this.
But wouldn't you be shocked if it actually happened? To me, that's the measure of "contender" versus "non-contender." Reasonable, rational basketball fans would not be shocked by a contender's championship victory.
If the Thunder, Lakers or Heat win the NBA title, few would gasp as monocles drop into champagne flutes. Miami is such a contender that their plausible championship run (famously) might extend far into the horizon.
Now, there is a buffer zone, wherein a team can win a title without melting the basketball universe as we know it. A Spurs-Celtics finals would lift eyebrows, right before those eyebrows sagged downwards upon the closing eyelids of a bored populace. The Bulls—with an injured Derrick Rose—also fit this category of mild surprise.
The Nuggets exist in their own strange space. They could win 56 games and barely budge those 40/1 odds. In fact, Bradford Doolittle's statistical model has the Nuggets at 51 wins on ESPN.com, not far off from win totals that we associate with contention.
So why the contender doubt? Well, I believe that the public and the pundits are actually wise to something here. The Nuggets are a perfect regular-season team, and an imperfect postseason squad.
They are deep, and while depth is always an asset, it can be a deceiving quality in the regular season. Extra depth helps a squad eke out wins in the 82-game slog, when superstars are traditionally playing between 34 and 39 minutes per night. If your squad's backups are superior in that nine-to-15 minute stretch, you will take some extra victories into the postseason.
Then, in the playoffs, those superstar minutes balloon. Take Dwyane Wade, for example. D-Wade averaged 33 minutes per night in the 2011-2012 regular season. When the playoffs came around, Wade had his playing time boosted all the way to 39.4 minutes. LeBron James experienced a similar PT jump, going from 37 regular-season minutes to 42 postseason minutes.
Suddenly, a team that often won with superior depth is either not playing bench guys against those added superstar minutes, or playing bench guys against those superstars. The advantage of depth shrinks in the playoffs. It's always good to have a bench, but the regular season wildly overstates the advantage.
Denver lacks a superstar—for now. Andre Iguodala is a great addition to this team and should shore up an inconsistent defense. They will continue to be a League Pass wonder, playing a fast, frenetic, offense-friendly brand of team-oriented ball.
I'll watch as much Denver as I can. I just don't think, for even a moment, that this viewing experience will extend into June.