"Star-gazing" as a problematic issue primarily applies to the individual level. An individual player may never live up to the star rating assessed by recruiting services as a prospect in high school, or an individual may exceed the star rating that was assessed. That happens all the time because we are dealing with human beings. Those ratings are based on "potential" as informed by various metrics that have decent reasoning behind them, but in the end are still just projections.
Where "star-gazing" can start to have some merit is on the macro-level. Simple question: if all other things being equal (heart, grit, etc.), would you rather have a team composed of 65% 3-star rating players, or a team composed of 65% blue-chip rated players? Be intellectually honest. But one might argue, "the portal now changes everything!" It does change a lot, but do we have enough data yet to demonstrate that prioritizing the portal with your resources over high school recruiting leads to long-term success on the field? There is a statistically significant correlation that the teams who maintain high blue-chip ratios tend to be the teams that have the depth to consistently challenge for conference championships and playoff spots. Some highly-rated individuals out of high school won't pan out—just as some 3-star players won't pan out. It's a luxury of depth if you can replace a 4-star kid who didn't pan out with the athleticism of another 4-star kid who did pan out. That's why on the team-level, the ratings actually do matter.
Indiana is now the prime example of how a program can quickly go from a doormat to a world-beater: significantly use the portal for experienced players who have shown production at the CFB level—regardless of their high school high school ratings. It certainly worked for them in two years, but they have a great coach. The questions are: can other coaches pull all the right strings together and replicate what Cignetti was able to do? And, will even Indiana find sustained, success over the long-haul doing things the same way they have the past two seasons?
The second question has a problem, though. With the incoming recruiting class, Indiana is set to bring in the same number of blue-chip recruits in one class as it currently has on its entire team. And after this season, I'm willing to bet that ratio only increases for them with the next class. So, what does that mean? Well, the Indiana experiment with building a winner based on proven portal guys who came in as 3-star prospects in high school is now certain to evolve; it's not going to remain the same model. In other words, we may not necessarily see, at least from Indiana, whether the model they are currently using can have sustained success over the long-term. What has been proven over the long-term is that if you maintain a high blue-chip ratio, then you at the very least set yourself up for being in the mix for playoff spots on a regular basis. Using the portal for upgrades at that point becomes the potential enhancer at that point, especially if you target production in the portal over potential.
It's worked out really well for Cignetti. They really hit on their "misfit" portal transfers. A year ago, how many people really saw Mendoza winning the Heisman and leading his team to the national championship game? But, can that be easily replicated? One of the dirty secrets about transfer players is that there is no guarantee that the collection of players you bring in who were developed elsewhere will mesh well within your program and how you want to find success on the field. Now, the same applies to bringing in high school recruits. However, the advantages there are 1) there is more time to evaluate and to get to know those recruits, 2) you control their early development pathway, and 3) there is more time for them to find how their fit into your program and system. In conclusion, I do not yet see enough evidence to prioritize resources in the transfer portal over prioritizing high school recruiting. They both need to be heavily utilized in this new college football environment with the greater emphasis on building upward from the foundations of high school recruiting.