Not true. In fact, it is an old and tired excuse used for decades by Penn State recruiting opponents. Penn State Football has recruited and signed tons of high profile HS players for many decades spanning the Paterno era.
Other ”middle of nowhere” places have prominent college athletic programs. Examples: Norman Oklahoma, Eugene Oregon, College Station Texas, Athens Georgia, Clemson South Carolina, South Bend Indiana, Tuscaloosa Alabama, and Lawrence Kansas. None of these locations would be confused with LA or New York City. Yet, they continue to have thriving athletic programs.
Tradition, historical success, university reputation, and coaches attract players regardless of location.