His policy does work, and it is definitely something Arsenal fans should be proud of. However, to a point he was working with what he had at his disposal, but now that there's more at his disposal he hasn't only not used it, he's gotten even more stringent.
There's really no need for it, whatever benefits are available are there because Wenger sowed the seeds in the first place. He brought Arsenal back to the top of English football, he kept them there when the stadium investment was put down, and he's still there now when all his hard work has resulted in Arsenal being probably Europe's second most profitable club at the moment.
The thing with his kids is that whilst he breeds fearless youngsters, when it's backs to the wall they crumble. Thierry Henry was the balance between fearless youth and the patience of experience, but Gallas & co. can't do it as well as he did.