That overlooks a couple of things.
For season 2013 there was zero recruiting done apparently owing to administrative oversight.
Also, that u17s team would have been coached by Tony Dempsey (I think) who is the colts coach this season together as was this season's assistant.
Players like Matt Dixon and Mitch Hardy came from public schools into gordon colts but they were playing colts when they were still under 18. That was late 80's.
In the early 80's the place had a lot of public school kids. In 79 CHS toured Japan and half the Colts had CHS kit in 1980.
There hasn't been much change in the numbers of kids enrolled in the north shore private schools in the decades since so i think, yet again, there's a strong case for attributing this fall off to a decline in the playing of rugby in the public schools and a massive change in the demographics in and around Chatswood: a clue lies in the name of the centre where the club house once stood!
Presumably the concern you express is the reason for abolishing the grandfather clause: but don't expect to necessarily improve the quality or quantity of rugby, on the contrary.