There are 18 counties, still tons of opportunities for English players. We had this argument in football for years and now England produce loads of good players.
We did, and we do (up to a point, anyway), but I read somewhere that Southgate was worried about the number of England players being produced in the future because of the number of England players in the EPL. Clearly this isn't the only factor. Looking back to the early 1990s, we were struggling to find enough talented footballers for the national team even though there were hardly any non-British players in the 1st Division. Obviously the clubs' development systems are miles superior nowadays, but my first instinct is always that Southgate is right.
As for cricket, I remember trying to discuss this on another site with a bloke who, as it turns out, wasn't interested in sensible discussion anyway. My pov was that the number of top players being produced by the English system was already declining before overseas players were admitted to the county game in 1968. So in the 1960s, we saw five top players start their test careers
(Edrich, Boycott, Snow, Underwood and Knott), whereas the number on the previous decade was way higher
(May, Cowdrey, Graveney, Barrington, Dexter, Trueman, Statham, Tyson, Illingworth and Lock spring to mind). Obviously lots of other blokes came through who were perfectly respectable cricketers, but not quite of the standard required for England to be a top test side. So, on that basis, the 1968 ruling was irrelevant as the decline was already underway.
Also from memory, I don't think the counties were restricted to only two overseas players after 1968. Hampshire had three
(Richards, Greenidge & Roberts), as did Kent
(Iqbal, Julien & Shepherd), Gloucestershire
(Procter, Zaheer & Sadiq) and Warwickshire
(Kanhai, Kallicheran & Murray. Maybe Gibbs too?). Maybe it came down to clubs' finances or sponsorship deals for individual players.