The short answer is an obvious Yeah. The depth and quality of SA cricket has been impacted. It probably means little to the national side at the moment but the movement away from SA by the talented 2nd tier guys and many young players will weaken the development and the talent of young players coming through. It does this by reducing the competition for national team spaces and weakens the strength and depth of the domestic game.
You could make 2 (possibly 3) very talented SA cricket sides from the players in Franchise cricket. However, mainly, due to this 'brain drain' the standard drops pretty sharply after that. The loss of these players deeply impacts the overall depth of the available Protea players and the number of talented young players coming through.
I, personally, would encourage any South African that wasn't assured a test berth to go to England.
Greater opportunities + More Money = No brainer.
Especially for the guys that are talented but are of an age that SA cricket will ignore them or young guys that will struggle to get game time due to the cut back in the number of teams and many other players clogging the system and their development.
A few lists. No country can possibly claim that losing players in such numbers can be anything but a worry and a problem.
SA Kolpaks taken from this thread
http://www.cricketweb.net/forum/showthread.php?t=23985&highlight=kolpak
Greg Smith, Derbyshire
Dale Benkenstein, Durham
Grant Hodnett, Gloucestershire
Martin van Jaarsveld, Kent
Ryan McLaren, Kent
HD Ackerman, Leicestershire
Claude Henderson, Leicestershire
Charl Pietersen, Northamptonshire
Riki Wessels, Northamptonshire
Lance Klusener, Northamptonshire
Charl Willoughby, Somerset
Deon Kruis, Yorkshire.
Jacques Rudolph, Yorkshire
Garnett Kruger, Leicestershire
Arno Jacobs, Leicestershire
from the same thread,
SA Born and raised but playing in the UK on an EU passport
Michael Lumb- Yorks-SA
Ant Botha- Der- SA
Kevin Latouf- Hamts- SA
Nic Pothas- Hants- SA
Ryan ten Doeschate- Essex- SA
Marc Rosenberg- Leics- SA
Nick Compton- Midd- SA
Chad Keegan- Midd- SA
Ben Hutton- Midd- SA
Craig Kieswetter- Som- SA
Jade Dernbach- Sur- SA
Neil Carter- War- SA
Tim Groenewald- War- SA
Jonathon Trott- War- SA
Neil Dexter- Kent- SA