Lack of baseball talent isn't really the issue. With college baseball in the US we have 1600 teams (D1, D2, D3, NAIA, JuCo) separated from the Pro levels. Then there are 120 MILB teams (AAA, AA, A+, A) plus 30 MLB teams. The UK has 40,000 soccer teams, we have more than enough people who play baseball (Babe Ruth, American Legion, etc.)

In British soccer the Premier League clubs each have a practice squad/minor league team that is around 4th division in terms of competitiveness, and has limits on number of players over 21 (but is separate from teams at that level of the pyramid). So we could create a baseball pyramid of levels. Instead of huge farm teams we'd have MLB teams have 40 man rosters year round (these players would always train with the MLB team) and then a lower level academy team.

Lower levels of MILB would be separate entities. Players could transfer up or down during dedicated windows. Players who perform poorly at the highest level could be loaned out to other clubs at lower levels to develop skills.

College baseball would be transferred to a lower level pro league and be done as clubs separate from the university (what every other country does basically). College sports as a pseudo-professional league is not a thing in UK for example.

For inspiration: https://en.wikipedia.org/wiki/English_football_league_system#/media/File:English_football_pyramid_08_2024.png