It's not as if its completely free for the team after the transfer fee. They have to train, feed, take care of medically, and pay the players they bring in. I don't think it's as simple as you're making it out to be from a financial perspective. There's also accounting for the possible situation that the player flops and becomes useless to the team from a sporting perspective and just leeches off the club, never getting sold, like Malouda and Torres at Chelsea, Arshavin, Chamakh, etc.
I think spending more money on top talent is the better way to go. They'll sell at an increased value later on and the cost of the transfer fee is amortized over the length of their contract in the case of success it can become a moot point (so long as you don't go crazy with spending like City)