One of the things that has stopped the development of players coming through is players getting a few good games at say Aberdeen, Hearts, Dundee United, Hibs etc. And suddenly bigger clubs come fishing. Initially it was Celtic and Rangers in the 90s. They would sign the likes of Derek Riordan and others and not play them. That in itself kills the league. And reduces the quality of player.
Englands top clubs always took the very best in the past. As you say Dalglish, Souness, Gray and many more before that. But a few years ago a player would sign for Fulham, Derby or Middlesbrough etc. The next time you see them they return to Scotland with 2 or 3 league cup games in 3 years and sign for a Championship side in Scotland looking a worse player than before they left. When maybe staying a season or two more would have seen better development for these players.
The best Scottish players now play in the Championship down south or at Hull, Sunderland or Stoke.