I have done it several times. There are pros and cons
If you do it to clear salary and hoard money, it's not so bad. There are always players available on the TL at the beginning of the season. If you know what you want, you'll probably find it.
If you do it to draft players, it's not a sure thing. A couple of seasons ago, I tanked and started investing in the draft. I was able to buy all the categories available (70 points). I focused on 19 year old players because they were easier to gauge. I ended up with a HOF and MVP player, but both were really flawed. I sold them for good money. But I spent more accumulating draft capital than what I made back.
I take the time every season to look at who was drafted in my league. It's never a guarantee that a really good player will be in your draft. And it's possible to get a HOF player with 38 TSP to start who is not much of a help
You've got some good points here, I think. I'll respond especially to the parts on your post that are now in bold text.
As a HG team myself, I can definitely see lots of other value in drafting my own players, than just simply the possible economical value. Joy of "creating" (training) players from scratch, having to plan carefully due to optimizing whole team development, creating players that have played their whole career in my team, being able to play in Home-Grown League with like-minded managers due to having 100% HG team, etc.
However, like you well mentioned, this has often times been my experience as well - as far as economics go, it is so easy to spend more in a draft than what you can get out of your draftees if you sell them.
It's of course a complicated subject (potentially low sales price of prospects you've used lots of money to scout and possibly to train them bit further, using training slots in your weekly training and paying them salary), and making huge changes into that part of the game probably would change some other parts (or at least in terms of draft strategy of teams).
So it's not like there would be extremely simple way to fix/change this (other than maybe remove the restriction of maximum sales price, while I do understand why that exists in the first place - while I do understand it, it doesn't mean I'd like that rule though).
But I'm just saying it might be tempting for even more teams to consider 100% HG roster-strategy, if it would be economically even more tempting choice. There is of course a boost in economy of some sort, like was just recently discussed on other thread.
Having said all this, my experience on transfer list remains limited during recent seasons, but you can't avoid seeing "the usual selling prices" of your own players when you look at their player cards, and even from that it's possible to conclude that it's definitely not guaranteed to be economically the most efficient option to draft your own players. But like I said, to me drafting players and having 100% HG team is much more than making money, and I know I'm not alone with my opinion.
Speaking of which, we'll get to your second point (in bold in above text of yours), TSP.
Due to how training is (still, after all these seasons..) handled in BB, I think this is one of the biggest problems for me personally (as I'm in a position where I can't afford to tank/get relegated - some could ask what on earth I'm doing in this discussion then;), as you can only have limited number of lousy players in your weekly training rotation in order to be able to be competitive at least to some extent. (This could easily lead to another discussion on training, but OP didn't start the thread for that so I'll try to not make it off-topic).
There are lot more knowledgeable managers in BB, so take what I wrote from that perspective, but just my two cents because I think you had strong points in your reply, that I've also experienced myself during all these years.