I think they see it as both. Competition first, spreading the love second... thus an attempt to put in some balance but (with 40% of teams in Europe) still keeping it competitive.
you keep quoting 40% like that means anything. in this case i think 40% is low considering europe prob has c.70% of the world's best team . say top 32 example as above
as for spreading the love. it's more spreading the cash. i don't need to explain their motives.
regardless, better teams from europe are missing out (even ones who've had relatively successful qualification campaigns - e.g. play-off losers and likes of sweden/croatia) in this fairness.
ultimately that can never be good on a sporting level.