It's not like rosters are locked in stone. If someone has an abundance of good players then he can package them together for an upgrade, which is what people often do. A few guys in some of my leagues have built "dream team" squads by using this method.
Also, even someone who does better than average with his rookie picks is going to miss quite often. Those failed players will eventually be cut. So will old players who lose their effectiveness. Those two factors will create a lot of roster space for new faces.
I can't really speak for anyone else because I don't know the kind of leagues they play in, but most of my leagues have sufficiently large rosters to where you have 2-3 disposable roster spots at any given time. I'm one of the guys who likes to hoard picks and I rarely find myself forced to cut people I want to keep.
Having said that, I do play in one league with smaller rosters. I have found that it's difficult to hang onto 2nd tier prospects because there's simply not enough roster space to be patient. This has caused me to gradually change my draft/waiver strategy in that league. In general, I don't like small roster dynasty leagues though. I think they cheapen the experience, so I avoid them. If you can scoop a promising prospect off waivers at any given moment, you're in what I would consider a Fisher-Price dynasty league. I like leagues where the waiver wire is a barren wasteland of Nate Washingtons and Bo Scaifes.
It's a matter of preference. Some people really like playing the waiver game. I'm not one of those people, even in redraft leagues. I play in a redraft league where we only have 15 roster spots for a 10 team league that starts 1 QB, 2 RB, 2 WR, 2 FLEX, 1 TE, 1 DEF, and 1 PK. The result is that I inevitably have to cut people I want to keep every season. Teams who have crappy drafts can fairly easily find some gems on waivers to elevate them into contention. I don't really like that. It greatly diminishes the importance of the draft, which for me is the most enjoyable part of building a team.
Anyhow, I can see how mediocre rookie picks would be of diminished value in some leagues, but I play mostly in leagues where you have enough roster space to accommodate numerous prospects and be patient with their development. That's the perspective I'm operating from when I tout the value of picks. In smaller leagues I would be more inclined to swing for the fences and/or pick prospects who have shorter development time frames (i.e. take the rookie RB who will get a chance this season over the backup rookie QB who won't start until 2 years later).
I completely disagree with this sentiment. I actually think the large-roster dynasty leagues are the Fisher-Price type. My favorite, and most demanding, league - by far - is a 10-man league with 17-man active rosters (we have no kickers or defenses) and a two-man taxi squad that only rookies can be on. It's also a salary cap league and features contract years (and a cap), as well as franchise tags.The reason I like that model so much is because it forces people to be active and make decisions on players. It's one thing to scoop up some rookie flyer when you've got 25-man rosters and no contracts. It's quite another thing when there are some decent players on the wire each week and you have to sign a guy to a contract if you sign him (and potentially eat the dead years if you end up cutting him a few weeks later). This causes owners, in my opinion, to be much more informed.
Anyone can go out on a waiver wire and scoop up flyer after flyer if there's no real cost in terms of roster spots or contract years or someone better on the wire. THAT'S Fisher-Price, if you ask me.
The other nice thing about this model is that it forces some turnover in the league and allows bottom feeders the opportunity to try to turn their team around faster, which I think is critical in dynasty leagues.
My experience with the large-roster dynasty leagues is they become very stagnant. Everyone picks up their players and never, ever lets them go, because they don't have to. There's not nearly as much trading, because teams don't have to. And then the bad teams can never get better, and so they quit, putting the whole league at risk.