The NYC was good in theory. Young players were able to play in the same jersey as their NRL heroes. And if they were lucky, even get on the TV. I reckon that would have been great incentive for 15-17yo players who were being courted by both League and Union.
The reality was though that failing to make the NRL squad immediately was deemed a failure. Even though we know that most forwards don't hit their form until 25+, often older, going back to the second tier, having to hold a full-time job to pay the bills, it was a reality check that hit many of them hard. Especially when some of their peers were being offered ridiculous money by desperate NRL clubs.
The tipping point I assume was that kids were literally killing themselves over it. Regardless of the benefits that the NYC brought to the code, nothing is worth that.