Let's use a restaurant analogy. If Illitch bought a restaurant for $85,000, which is now worth $1.1 Mil and he has lost $100,000 over the last 5 years and probably will lose another $20,000 this year. The kitchen is a complete mess and he needs to upgrade the oven. The tables and chairs have seen better days. All while he is paying top dollar for his cooks and wait staff, some of whom are threatening to quit if they don't get more money.
Does it really matter that his franchise has increased in value?
Most other franchises make money. And I mean make money. The owners don't pocket all the profits. They re-invest back into the team. One of the costs is player development. The lack of dollars spent by the organization on player development is really stark compared to other teams.
Others will point to the fact that it isn't their money, but that is missing the point. At some point the oven, tables and chairs need upgrading. That money has to come from some place. And generally it comes at the cost of team payroll. Teams cut payroll to turn a profit. They take that profit and upgrade their infrastructure, top to bottom. Then they start adding payroll back up. This is exactly what the Houston Astros have done over the last few years. Yet, they were not as far down with lack of player development as the Tigers are.