Lol, what a load of complete rubbish. This is the problem with preconceived notions, and fabricating opinions/analysis to fit them.
The brief on Levy has always been that he's a tight git and ball-buster to negotiate with who has often tanked transfer deals because he was too inflexible and demanded low fees.
Now you're saying that man is spending more than necessary on 2nd rate players so that it looks on paper like the club is spending a responsible amount on the playing squad?
Utter nonsense, and even if it were true what would be the fucking point? That would be beyond not being overly interested in the results. The only motive behind doing such a thing would be to intentionally hamper the football club.
We've spent poorly, for reasons related to the grain of truth sand in your post - we prioritize signing cheaper and younger players with high potential over chasing the signature of players who are already Tier 1.
You correctly point out that this is largely related to our spending plan which limits our wage bill to ±50% of revenue. We need to hike this up to ±60% of revenue to be seriously competitive.
But, even with increased spending in fees and wages, we'll struggle to sign Tier 1 players. Liverpool and Woolwich, for example, generally prioritize similar philosophies as we have. They focus on signing quality young players with high potential, but generally beat us to the signings because of wages and demonstrated success on the pitch and in player development.