I agree to an extent, but I think loaning to English clubs is the main problem.
We've loaned players to Championship, League 1&2 and also Premier League (Guidetti) and none have got the player anywhere near our first team.
But you look at Denayer at Celtic, learning that winning mentality (hopefully Roberts too), Ntcham, Jack Byrne, Guidetti at Feyenoord, Fofana I think, other players in Holland and elsewhere in Europe... and there seems to be quite a lot gained.
I attribute this to the fact that the English football club/fan mentality is too cynical, pessimistic and too short-term focussed/impatient - look at Barker who had a great debut and was then thrown on the scrap heap at Rotheram! Whereas on the continent fans seem to be much more receptive to young players learning their trade, and appreciate them a lot more. And then you have the different football cultures that are often a better reflection of the game City are trying to play.
So in short I wouldn't loan to English teams if the player has first team potential - hopefully the club are getting better at this and building good links with Celtic, Girona, Cambuur etc.