I think it's similar to potential, in fact - in both cases anything below about the midpoint of the range is written off as not worth using.
That's exactly right. And contrary to some people opinion, managers came to this conclusion based on rational economic reasoning.
True, rational economic reasoning can show that. And it can also be wrong.
Let's say you have an 18 year old, star potential player that you drafted (or even paid up to a couple hundred thousand for). You spend four or five seasons with a level 4 trainer two position training four or five other guys with him to get a guy built the way you want, say factor in another three hundred thousand for that (seventy weeks at roughly 20k/week, divided among five players). 500k for a player built the way you want, who can play meaningful minutes at any level in the game, for fifteen seasons, with the fan survey and merchandise benefits that accrue? I don't know how to value that on the ledger, but I do know not having to go out and buy a backup guard/SG/SF every few seasons and eat depreciation there is worth it.