In the vacuum of that window, absolutely. When you zoom out and realize their ascension to the Premier League involved consecutive seasons of 30+ million pound net spends, it looks quite different.
You make a very good point in focusing on wage bills, as those are the larger part of the overall squad budget for most teams in most seasons and do correlate much more strongly with success, but in general you can't appreciate one without the other.
If I could go back in time and spend the money that has been bled out of the club in the transfer market, I probably wouldn't invest it in incoming players at all. I'd make wage offers to Gareth Bale and Luka Modric that exceeded what Real Madrid were willing to pay. That would likely be worth more points than whatever that money could have brought in the transfer market.
But one way or another, every marginal extra pound you spend on your squad is a positive, and every marginal pound you don't spend is one that could have helped you.
If all of Tottenham's profits are being plunged into stadium financing, training facilities, and youth development, I think that's brilliant. I think those are exactly the type of competitive moves a club that isn't yet as rich as the clubs it wants to move ahead of should be making. But the proof is going to be in the pudding with those things. If we have a squad cost like Woolwich when our stadium starts producing matchday income like Woolwich, as well as the financial firepower to attract stars like Woolwich, then Levy will look like a genius.
I refuse to be called a melty cunt, however, for pointing out the myriad reasons for us to doubt that that's where we're actually headed.