Unless you're hiring John Calipari or Rick Pitino or Bill Self or some other master recruiter who will bring in a bunch of high-level 4* and 5* talent, I disagree.
First, sure we can win without local kids, agreed, but it will be harder. Second, we will never get all the local kids to stay home and no one should claim that we will. Third, keeping local kids is more important now because the local pool is so much better now than even 15 years ago. Let me be clear, I'm not suggesting "settling" for lesser Minnesota talent over better talent elsewhere. I'm talking about putting a much stronger effort into getting the many bona fide high major players from here to stay here. That has to be a priority for many reasons, but mostly because it should - in my opinion - make recruiting and winning easier.
Reasons I believe this:
1) (No brainer) The MN high school basketball talent is at an all-time high. There are more high caliber, high major Division players here than ever before. That alone should help you win games if you can keep some of these kids here. It must be a priority with the next coach. To me, it is non-negotiable that a new coach has to put in a much better effort than the previous staff on understanding the importance of recruiting locally. If a coach tells Mark Coyle in an interview that he doesn't value local recruiting, that guy is out.
2) Minnesota high school kids are here. For most, this is home. It is a selling point that ONLY Minnesota has. Mom and dad want to watch their kids games in person? Stay home. You want your friends to see you on the TV news they watch and see pictures of you in the paper that they read? Stay home. And, you want to play with some of your AAU teammates? Two or three of you stay home. A new coach must be persuasive and strong in his feelings for keeping kids home and building a culture here using MN kids as a backbone. That's the blueprint, especially now there is loads of talent here. Lose a kid to Duke or Kansas? It'll happen. Lose a kid to Xavier, Marquette, even Wisconsin? Still might happen. But, it has to happen less. Way less. New coach has to make it happen way less...like way, way, way less.
3) Recruiting local kids takes fewer resources and should be easier to build relationships. Coach recruiting a local kid? No problem, hop in their car, drive 25 minutes to a high school gym or a prospect's house, recruit, recruit, recruit. No missing practice, no flight to book, no car to rent and refuel, etc. Local kids want to make a campus visit? He and his family hop in his car and they're at your game against Michigan in 25 minutes. Way easier to keep in touch and have things in common to talk about if you're all in the same city. Info to exchange is much more grassroots in developing a relationship. There is a head start in knowledge of each other. All that should make it easier and less costly and time-consuming to land a kid from here than it is flying to Detroit to connect on a flight to Akron, rent a car and drive to a high school to watch a kid play, spend an hour asking about his high school and spend another hour telling him about your program, only to hop in the rental car, drive to a crappy hotel, miss that day's practice, and fly home the next day. Of course, you'll have to recruit out of town kids, but not ALL out of town kids.
4) Local people pay attention to local kids more, creating more interest. Even if the kid isn't from your Minnesota town, he's from a Minnesota town of somebody you know. He may have played against your town. You've likely seen him written about in your paper, you may have watched him in the state tournament on your TV. That creates pride and interest. You might even go buy his Gopher jersey if he becomes a Gopher.
5) Local kids matter for the "heart and soul" of the team. Grow up here, play in front of family, the kids know what wearing Minnesota on your chest means. Minnesotans are a proud bunch, generally. Even more so when representing Minnesota, playing for the state.
6) A college team - the Gophers, for example - made up of a bunch of out of town AAU, prep school, hired-gun types is only good if the talent is off the charts (Kentucky, Kansas, Duke, etc). Usually at Minnesota, those type of kids aren't off-the-charts talented. Pitino relied way too much on those type of players. Those guys have to learn how to play as a team and value winning and culture. They have been playing for stats and chasing a scholarship for too many years. Most Minnesota AAU kids, however, have played on a high school "team" and know what it means to play to win. And, many observers believe that's part of why the Minnesota AAU guys win at a high level in the national events. They're good and they value winning. They play with a pride because they are from Minnesota. A lot of the kids Pitino recruited were playing AAU and prep school ball on multiple different teams over multiple years, some in multiple different cities and even multiple states. Hard to create a winning culture at a place like Minnesota with a roster full of guys who haven't valued winning much.
Again, not saying it is an end-all, be-all and definitely not saying you need a roster of 12 Minnesotans, that would be silly (unless of course they are all 4* and 5* kids).
But, winning should be easier if you keep a nice batch of kids home for some of the reasons I mentioned, as well as countless more.
A new coach could ignore the in-state talent or not put an emphasis on it. But, unless he's Calipari or Self or Wright, it is unlikely that approach will yield a more talented and winning roster, than busting your ass to keep some high end local kids here, while also bringing in some other talented kids from elsewhere.
Bottom line - with the right coach, who is persuasive and strong in his methods - landing a 3* or 4* kid who lives 15 miles from your campus is inherently going to be easier than landing a 3* or 4* kid of similar talents who lives in Dallas, Seattle, New York, or Atlanta. The right guy, who is committed to that, will land those kids. Not all of them, but enough to make a difference.