I totally understand what you're saying and you are correct that due to the unique position City are in where they have unlimited funds and therefore other clubs can command a higher fee for their player that City want to buy, but I can't agree with the last paragraph.
You're right in that their recruitment policy needs to be changed, but to say that they need to bring local lads who actually care about the shirt they wear in order to ensure success isn't the case because it has no bearing on anything. How many players in the Premier League are successful academy products? Especially at the top clubs? And compare that with how many have either been bought from other clubs or are foreign players. In fairness, City do have a few promising youngsters, but whether they will ever get sufficient game time remain to be seen. Either way, I don't think the fans or the owners care because they know that the money they are willing to offer is enough in itself to entice players to join them, whether they're flavour of the month or whether they are the next best thing. Due to the revised FFP regulations, I'm not sure whether City's success will be 'unsustainable' because I can't envisage anyone that would be willing to punish them properly if they fail to comply with the rules again.
They may be underperforming in Europe, but in the last 5 years, they've won 2 league titles, a League Cup and an FA Cup. Regardless of whether the benchmark for them should be higher or not, particularly when it comes to signing players, Mansour is still seeing his investment winning silverware and that is because, ultimately, the riches a club has will always be the decisive factor in the long-term. Nurturing youth, for the wealthiest teams, will never be a serious priority.