The other reason Free Agency compo needs to be abolished:
Example 1:
Lynch exercises his free agency right to leave the Gold Coast.
AFL compensation is Pick 3 or whatever it is because Gold Coast are crap. Gold Coast accept the compo, knowing Richmond can't do any better than that and Richmond don't give up anything except cap space for Lynch.
All clubs get pushed down the draft order due to the compo pick.
Example 2:
Jeremy Cameron exercises his free agency right to leave GWS.
AFL compensation pick is Pick 10 or so, because GWS had a better year. GWS know they can squeeze Geelong for a bit more, so they match the bid and Geelong pay stacks more for Cameron than Richmond do for Lynch.
No clubs (other than Geelong) are affected in the draft because GWS take Geelongs pick.
That's not to say that Geelong didn't pay fair value (they did), but that Richmond paid nothing and all other clubs got shuffled down the order, shafts everyone except Richmond and Gold Coast.
GWS couldn't match bids for Cameron as they had to overpay their other players to stop them from leaving.