I agree with this, for sure. This will wind up being a different product than NCAA basketball, and I doubt that we'll see too many G League teams locate in strong college markets. The only team with direct P5 NCAA competition at the moment is Greensboro, though you could make the argument that Fort Wayne and Des Moines are pretty close. (The teams located in Chicago, DC, and the Inland Empire have such a large population base that there should be room for both college and pro teams to coexist.)I will disagree with the last part in that the ABA, USFL were in direct competition with the NBA and the NFL. The G League isn't trying to compete with the NBA or the NCAA for fans. Minor Leagues franchises that are successful are a source of entertainment that is affordable for the community they are in, while the parent team is only concerned with the development of players. This is also why the G League teams are close to home to the NBA squad. It helps with players on 2-way deals moving up and down, but also for fans that can't afford to take a family of 5 to a Bulls game, go out to the burbs and watch the Windy City Bulls game. The only direct competition the G league will have with college ball is the select top recruits that will consider money over school for a 1 year window.
The single-team alignments and co-location with NBA franchises is one tipping point. If they really have any interest in making the G League a thing, I think the next move would be to have the bulk of the league's players be either actual prospects (i.e. draftees who could play for Europe-caliber money for a few years) or guys on two-way deals to make those links to the NBA teams a bit stronger. It's unclear as to whether that's of any interest to the NBA, though.
Even if they do all of that, I'm not sure it makes a dent in the college game. You'd probably only be looking at 10-20 guys skipping the NCAA per year, if that. It's not quite accurate to say that the NCAA and NBA/G League are two separate products, but that isn't far from the truth.