I think you are right that if a kid has enough talent he/she should shine through regardless. but didn't we see that problem with the Cajuns, that it helps to get more AB's or reps... granted travel goes way to far, so im not sure where the happy medium can be found.
another problem is, it cant be blamed solely on travel ball itself, as some of the great "municipal" parks and rec services we grew up with were probably facing cuts as well. so a void was developing on its own, without travel ball. I remember all you paid to play baseball was to pay five dollars for your own cap. (and you needed your own glove) but didn't need helmet or bat and gave the uniform back after the season. if you already had your own hat of that team didn't even need to pay the five bucks. and im not that old