There is a lot of truth in what you say. But I think it might almost be the counter that is probably the better question, ie "does a poor domestic game inhibit the development of quality players?"
I work in government, and the best advice I was ever given was "at best good government policy will only ever result in marginal improvements to people's lives - but the reason you should work hard to develop good policy is because bad policy will always make people's lives much, much worse". And I think domestic cricket arrangements work the same.
Having the same domestic structures as South Africa is never going to magically produce a kid with all the natural talents of Dale Steyn. But poor domestic arrangements might mean that the kid will never get to demonstrate those talents, or to develop them properly, or remain interested and challenged enough to kick on.