Generally a positive, as it never hurts to play a lot against better competition. Elite talent gets spotlighted, and recruit rankings are far more accurate now than they used to be. Given the highly select group of players that UK recruits, it makes things easy. You just have to scout a small set of players and decide which ones you want to really go after hard.
The downside is that it minimizes the importance of the team element of the game, and the importance of coaching. You get these huge talents who have never really been coached, and never had to learn all the little things that are so important to winning basketball games (which I believe is a big part of Skal's struggles).
But for those who like to hate on it (of whom there are many), a question: what's a better alternative? High schools can't run year-round programs, and even if they did, the coaching at many high schools is actually worse than on elite AAU teams. In terms of player development, it's hard to see how it's a bad thing that guys spend so much time competing against talented opponents.