On a related point, people often judge players based on success in college or pros thinking that the same players were 5* players back in HS, and college coaches just missed on them. While there have been some cases in the past (e.g., Duncan) where based on location it was hard to evaluate them, the way basketball recruiting works now, if you are a true 5* HS player in a small town, chances are that college coaches will find you.
Most of the missed cases are players who were not truly 5* players in HS but matured basketball-wise in college. I doubt Lilliard was that good in HS and everyone just missed on him. Most likely, he came into his own basketball-wise in college. At the same time, some 5* players never make that "jump" in college and other players catch up on them. I remember Richard McBride very early in HS. He really looked much more physically and mentally mature than his competition, a can't miss prospect. By his senior year, it was evident that other players had caught up on him.
There will always be exceptions both ways, but chances that you succeed with higher ranked talent are much, much better. While some coaches are better than others as far as projecting talent, it is almost impossible to consistently find those diamonds in the rough, i.e., the players who will make that "jump" later in their career in college.