This 'fatalistic' theorem re Kiwi dominance and, related, our immovably lowered chances of doing as well in elite rugby is flawed - though it's always had adherents here and no doubt always will, particularly in times, as now, of mediocrity and bad losses via the Wallabies' performances.
Let me offer one of many possible counters: if Australia was intrinsically poorer in rugby players, and coaching's role was solely one of marginal potential improvements only as we suffered fatalistically from the inferiority of our input stocks into the elite game level, the following would not be true:
From late 2009 in the case of the Reds, and from late 2011 in the case of Brumbies, two groups of allegedly 'no hoper' elite Australian rugby squads that had prior suffered appalling seasons of losses and fan disillusionment were within the short space of 18-24 months transformed into S15 winning or Finalist calibre teams. This was/is essentially down to coaching competencies much upgraded. And not just head coaches; as important were the Fishers, the McKays, the Fowlers, the Larkhams, and related S&C specialists. Cheika is showing the early, potential signs that he may achieve a massive improvement in the Tahs' chances of victory in 2014-15.
The truth is that excellence in sporting outcomes at the highest levels requires a combination of adequate talent and superb 'culture' management and technical coaching within elite playing squads.
Look carefully and you will find that the bigger problem in Australian rugby is not the quasi-Darwinian notion that that we have less capacity to generate the better species of player by the age of say 18-20, but rather that our elite level managerial and coaching competencies in general have not been nearly good enough and accordingly the quite high calibre of players we have consistently generated are thrust into the hands of inferior business leaders and technical coaching specialists. It's our generally poor standards of leadership that are the heart of the matter. Once and when we fix that problem with the right people solutions, our players perform exceptionally well and hold their own against the very best.