You make a lot of valid points and I used to think the exact same way but the BIG negative of this tactic is that these players take up spaces in the team leading to negative performances and results and stopping the progression of other better players.
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For example Vinicius. How many lost points and bad performances him playing last year did it take before they realised he isn't good enough?
Huh? Name one bad performance where he cost us points. That bit 'before they realised he isn't good enough' doesn't even make sense. He was very good before his injury vs Ajax, which ended his season.
He almost single handedly (bar introduction of Marcos Llorente) kept us in the top4 throughout Solari's tenure. We were actually shit in attack whenever he was not on the field, that's how much we relied on his influence, because we resorted to completely off form Lucas and Asensio before that. In fact he had an overall good season bar his finishing.
The argument of him curbing better players is nonsense too, because Real Madrid simply did not, and
still do not have anyone better. He's our fastest and bravest winger (one who plays consistently and doesn't get injured) who breaks the game up whenever we struggle to break a defense down. His unpredictability is his greatest asset and adds a completely different dimensions to the team. People are idiots if they believe he is worthless because he struggles in the final third. Whether or not he consistently makes the final pass is an entirely different conversation and it doesn't speak to him 'curbing' anybody's progress, especially since there physically is nobody to make a difference. Rodrygo is not behind him in the hierarchy so they are not suffering.
The only way you could try to push this is with Mendy-Reguilon swap where the latter probably could have stayed, but at the same time this doesn't stand up to scrutiny either because is 9 of Mendy's starts we kept 7 clean sheets i.e. he vastly improves our defensive balance. In a way that Reguilon did not.
The question is if there are local talents around, who are just as good.
In attack there clearly haven't been. La Fabrica struggle to nurture attacking talent between 10-15 years of age, but it doesn't mean there aren't any worth their salt. Jese, Morata and Vazquez are the best shouts who 'made it' through the ranks and only Jese was rushed to the top, but he's had a very difficult career on his own health and the health of his child so he didn't stay there. Then you have De Tomas and co level, which is still somewhat respectable.
And even then I think its more reasonable to bank on just a few of them. We are betting heavily on Fati and Ilaix for example, who both joined much sooner than Reals brazilian counterparts and look (probably) as good. Having both Rodrygo and Vinicius, even by chance, at the same time in the squad fucks them both over. Playing them in Castilla would be a massive waste as well. Loaning is pure luck as most teams would rather play their own talent.
Madrid tries to skip a few steps and save money. Fair enough, and we will see how that works out for Rodrygo, Vinicius, Kubo and Reinier etc... I would be shocked if more than one succeeds for Madrid.
I don't like this point on saving money because it removes a lot of credibility from the scouting we're doing. While probably he is trying to be ahead of the curve, it also makes total sense to buy the youngsters at this age given our track record from South America. We have had consistently great scouting there since 2005 - we bought Robinho (superstar in Brazil at 21), Diogo (aged 22), Marcelo (19), Higuain (20), Gago (21), Casemiro (21), Fede Valverde (18) and Militao (21, who counts because he was reported to be on the radar but club delayed and put their hopes in Vallejo so he ended up at Porto) + Vinicius, Rodrygo and now possibly Reinier. And we've had Fabinho come through our ranks in 2012 and Willian Jose in 2014.
How many of the above are or have-been world-class or close to world-class? Just because we pay 30-50 each time, doesn't mean this is any poorer or curbing anybody's growth in the youth ranks. Nor has their personal development been so far.
And if you're doubtful that we buy them TOO young, again, look at the above list and tell me honestly why any of the three we bought U19 could end up any worse than those above given their potential.