Absolutely none? Tell me how this is wrong:
1) Assume that the character of all recruits is the same, regardless of stars. Let's say that 20% of all recruits are low-character guys who will potentially hurt your program in some way. The exact % isn't important.
2) Assume that star ratings are absolutely reliable and regarded as such by coaches.
3) Assume there are 50 five stars, 150 four stars, and 750 three stars (think this is the approximate Scout model, though the precise numbers aren't important, just the relative amounts of each. There are many more three stars that four or five.)
4) Assume that coaches would not want a lot of guys with bad character and that they can reliably get a sense of a recruit's character through all the information they can gather. This is not perfect for sure and my argument doesn't assume that it is. Just that the character evaluation by a staff is significantly better than throwing darts.
First, if you are the head coach at a prestigious D1 University like Tennessee, how many of the 150 low-character 3 stars are you willing to take a chance on? Me? Zero - there are plenty others to choose from at this talent level, so if I see a red flag in a three star I don't pursue him at all. Didn't have time to consider 750 of them anyway, so this filter is most definitely ON.
How many 30 four stars with red flags would you take a chance on? Not so sure for me. If I've got a position of need and feel particularly good about a four stars talent level, I might take some a few chances here. Might pursue the 15 that I think have the best combination of needed talent and acceptable character risk.
What about 5 stars? There's 10 of them that have some red flags. How many do you pursue? Shoot, I like my job and need talent. I might decide that 7-8 of them are acceptable risks, even though I see red flags. Figure the risk is manageable, because I'm not going to get anywhere near all of them anyway. Can live with 2-3 guys here that I consider character risks.
Now, if you agree with all of that, great. What does your committment list look like with respect to character? The lower the star rating of a guy who is committed or signed by a high level program that has choices, the better the character ON AVERAGE. Doesn't say a thing about any particular highly-rated guy and says nothing at all about the entire pool of recruits (remember - all groups are exactly equal with respect to character). It just says that programs are not as likely to take recognized chances on lower talent guys than on guys who are projected to have big and/or immediate impact. That strikes me as fairly obvious and sensible.
If you don't agree with this, which specific point do you have a problem with, I wonder? I think the whole character/star argument is mostly a result of sloppy arguments and thinking.
Of course, I suppose I could be wrong. High level coaches might not care about the talent level when deciding whether to pursue a guy with red flags with respect to character. But that seems highly unlikely to me.