You make some good points. Dombrowski and the Tigers did have some very good years, as teams who are in "win now" mode usually do. However, during that span, they did not win the World Series.
I think it is very possible to have the same run of success without being in "win now" mode. It is very possible to build a franchise that can compete both in the short and long terms.
I think we agree that it starts with the farm system. It might be necessary to hand out a big contract to a free agent once in a while, but that should not be the norm. IMO, the free agents that are signed should be more of the solid, 2nd tier type players, not the superstars. The superstars should be the guys that are home grown. I also prefer paying more per year for fewer years rather than having a longer contract.
As far as why we haven't been able to graduate #1 pitchers, I think part of that has been our draft position, and part of that has been our draft philosophy. If the farm is strong enough, however, a top starter can be acquired through trade.