I agree it's not sustainable from a fan POV (not good for the game), but I think it probably is sustainable from a competition POV.
A baseball team (failing a bunch of injuries) needs about 12 hitters and probably 13 pitchers. To meet those needs you bring in 5 or so hitters each year from the high school ranks, keep 2 or 3 of them for year 2 (this year that is Burress, Kerce, and Lackey for us) and over a 3 year period you have between 6 and 9 hitters. Let's cut that down the middle and say that you have 8 good home grown players per season (4 freshmen, 2 sophomores, 2 juniors). With the shortened MLB draft you can probably assume that you'll have 1 John Giesler type who stick around more than 3 years, so now you have covered 9 of the 12 spots needed with home grown talent. For those final 3 spots you hit the portal for SoCon or C-USA players who have been developing over the past 3 years. That seems sustainable.
The pitching side is more challenging, since scouting is much harder for pitchers than hitters, and also injuries are much more common. But a smart coach will scale for that and bring in about 8 freshmen pitchers each season with the goal of hitting on maybe 3 of them. One each year for a weekend starter, one each year for a mid-week starter, and one each year for a bullpen piece. That's 9 arms, and now you need to find about 4 each year between home grown 4th year seniors and transfer portal additions. Admittedly we have struggled in this area, as this year (for example) I only see McKee as the weekend starter piece, Ballard as the mid-week starter piece, but apparently NOT Kovala as the bullpen piece. And years prior to 2024, I don't see a whole bunch homegrown talent there outside of Riley Stanford.
Its really not any different than how a major league team builds their roster. They need homegrown talent for sure, but very few teams can depend on strictly homegrown talent. The biggest issue, from where I sit, is that these are college kids hopefully trying to get an education while also playing ball, not grown men who know they are entering a cut throat industry.