Now you're going all Mulvaney, lol.
Let's look at the context again:
Please explain how small market teams still have the ability to spend more than large market teams on amateur talent. The "pool money" scheme promoted by the Red Sox and other large market teams eliminated that.
I'll follow up with this:
2011 MLB Draft: Pirates Shatter Draft Spending Record
What did $17 million buy in FA in 2011 that was a better investment than Cole and Bell?
You're arguing that teams need to pay premiums for mediocre talent just to spend the money. I'm arguing that investments have to be made to improve competitiveness, but I don't care if it's amateur or pro.
Regarding your point on extensions. The Pirates have done that and have been mostly successful (McCutchen, Marte, Polanco). But that was also several years ago before salaries for even mediocre players became stupid. We're finally starting to see push back on that from owners unwilling to sign marginal players in the offseason until prices come down. When the FA market finally starts to price itself according to WAR performance/projections instead of comps based on service time, you'll see the extension market explode across the board.