Another thought I had is that if this way of thinking caught on, wouldn't the undervalued players suddenly be worth more financially and ruin the whole plan?
What he tried to do was stay ahead of the curve and develop proprietary stats on things like defense, and rebuild the A's around that undervalued commodity. We actually made it out of the first round of the playoffs with that approach in 2006.
But basically (a) the Red Sox hired Bill James and both they and the Yankees had teams with massive On-Base Percentage offenses; and (b) Beane went all-in with a big contract to the homegrown Eric Chavez (a rarity being a non-steroidal, 30 HR, Gold Glove defensive third-baseman) and Chavez's shoulders blew out.
We also had cornered two stud pitchers in Dan Haren and Rich Harden that were as good as anybody in the league, and we were looking to build on that but Harden kept getting injured and Haren was traded off to rebuild the farm system. So we kind of got unlucky with injuries to Chavez and Harden who could've been perennial all-stars. Also our Rookie of the Year shortstop, Bobby Crosby, didn't improve but actually regressed.
Bottom Line: you can still find undervalued talent but if you have big money you can overcome your mistakes.
(Actually the next big Moneyball team was the Tampa Bay Rays who were a long-time loser team in the toughest division - the AL East with the Red Sox and the Yankees (who have massively huge budgets). Their front office guys were all out of Wall Street arbitrage and they found the great undervalued asset was actually young baseball players. This was due to the fact that baseball teams control players for the first six years of their career, and during this cost-controlled period most players are at their most productive. The Yankees went on a binge of high priced (older) free agents who were past their prime but the Rays developed from within and despite a crappy stadium, and poor attendance beat out the Yanks and Red Sox twice in the last couple years.)