I share your sentiment. The whole loss of scholarships being "crippling" is complete hogwash. It's an excuse, nothing more. When the penalties/loss of scholarships hit, most here (myself included) opined that they were significant and harsher than they should've been considering other schools, similar violations, etc. But, I don't recall anyone at the time saying they were "crippling!" It's so very convenient to argue this was the proximate cause of the downward trend, but IMO, it's secondary at most.
Bilas himself stated that the penalties were more severe than they should've been, and took his own jabs (and rightfully so) at the NCAA, however, he felt it really shouldn't be that large of a factor considering JB's traditional and historic short bench. JB historically has always gone 7 and at times 8 deep (that # reflecting players that actually play meaningful minutes when the came is still in doubt/on the line, etc.). We still were able to have 10 scholarship players on the roster each year, and had schollies available late in those recruiting cycles, where we were stuck (if not somewhat desperate) splashing into the graduate transfer market.
Additionally, even with those 10 vs. 13 schollies there was still some room to develop players, but JB & his coaches came up short, and in doing so, it was a substantial contributing factor. Moreover, shear misses on the recruiting trail have loomed large as well. Evident by our continued attempts to land a top point guard since Ennis' departure and also at the 5 spot. Having to place MD there more often than not speaks for itself in regards to our huge deficiency there. Honestly, I'm not sure that our two centers would start anywhere in the ACC over the guys those schools have at that position.