I thought it was pretty clear that the argument of "we had bad draft position" is a poor excuse for the farm system dipping. And contrary to the claims of some here, it clearly was dipping at the time Smith took over the role.
Again, Smith made A LOT of mistakes. But he also oversaw the drafting, signing, or developing of most of our current top 10 prospects which, by the way, makes this farm system one of the top 3-5 in the league at this point. And I'm not convinced that Ryan's track record would have been as positive if he was in charge in that stretch.
Ryan has plenty of positives he brings back to the organization, but let's not pretend Smith's aggressiveness had no payoffs. We may be about to reap those rewards.
If the counter argument to low draft choices is that other teams are able to get good players later in the draft as evidence that is a poor example. The Twins have done that as well.
I would suggest the main reasons were (in no particular order): lower draft choices, few comp picks, minimal established player for prospect trades (because they were usually competing), lower budgets on international signings, general reluctance to go over slot in the draft. It is interesting that once Target Field started getting constructed and the promise of future revenues was secure that the last two became less of an issue and the farm system started to improve.
Perhaps the better lesson is that Terry Ryan and co. did OK as a small market team in the early part of the 2000s and that once the revenues of Target Field started to come in it allowed them to compete on more levels. There is more to Target Field than just major league payroll.