Finch was no moron, but he did have to contend with D. Kirk's mess when he first became coach. Finch did just fine recruiting, having grabbed Penny, as well as Elliot Perry and Lorezen Wright. He had 7 20+ win seasons, 6 NCAA appearances, and elite 8 and sweet 16 appearances during a 4 year period. He left as the winningest coach of all time at Memphis.
He wasn't a slouch of a player either. Left as all time leading scorer at Memphis and lost in the finals against Wooden's UCLA.
Yes, Memphis is currently a recruiting hotbed, but no more so than some other similar cities like Louisville. Penny will lock this city down for sure, but as Calipari proved (Rose, CDR, Evans, etc), you gotta also have some outside talent to take it to the next step to compete nationally.