No.This is a much peddled myth. If it was true, we'd have the finest Championship and League 1 players in the world for the following reason; Don't know about you but if i had any footballing talent at all and could earn £50K a year doing it, I'd be doing it. In fact, I'd probably do it for £25k a year and sod teh fact that "it's a short career", I'd do something else afterwards.
Given the fact that in the Championship you can earn in excess of £100,000 a year and in League 1, £50k a year, any decent English player edged out of the Premier league by foreign players would be plying their trade down there. If they were good enough they would soon be spotted and picked up by premier league clubs. But they aren't there. That means that the talent isn't coming through at all.
We could debate the reasons for that forever but I reckon it's due to the death of school football and the rise of Charlie Hughes and Howard Wilkinson's shite training methods in the 80s and which still, I think, influence todays thinking. Furthermore, the demise of schools football means that junior football has ceased to be competitive with all the best players clustering at certain teams with the result that the lesser teams are on a constant downward spiral until they fold. The knock on effect is uncompetitive diminishing leagues.
Throw in the Health and Safety shite and it's no wonder the English game is on its arse.