I would agree with you about squads, we cant maintain high quality squads, or I should say we couldnt maintain high quality squads, because currently we have a high quality 4/5 players, middling first teamers and squad fillers.
I disagree about the trophies, Cardiff won the old Amlin, Scarlets Celtic league, but they were years ago, and the teams have declined year on year.
We have been on a steady decline since the inception of regional rugby, all those who knew it wouldnt work were probably right when we look back. Ultimately we are sliding to tier 2, not just the club element, but the lack of development.
I have worked in development in 2 reasons, I've seen the heads and the academy managers, I've seen the brother in laws put in development positions because they are brother in laws, I've seen ex players occupy key roles with absolutely zero qualification and experience for the role, I've interviewed against them chatted and been embarrassed by the lack of knowledge. Granted I got out of that 7 years ago, but if it's still run anywhere near as bad, which everyone seems to think, we are doomed.
I fear for Welsh rugby.