Disagree with you on that one but certainly think it should be restricted. Got no problem with 'senior' players who aren't in the first team being loaned out within the window (this seasons examples: Xisco, Nicky Shorey, Jo, Benjani, Alan Hutton and many more) so that they can get games or 'put themselves in the shop window' or whatever. The emergency loan thing is ridiculous though and should be abolished after next season (so that clubs have a full year to stock themselves with keepers or whichever position they need and therefore can't complain).
However, you are right about the young players thing and I highly doubt, for example, the Shelvey to Liverpool deal would have gone through if there wasn't a possibility he could be loaned out. Don't think he'd go there if he knew he was playing u18/reserve football for the next 3 or 4 years.
I still think young players should be able to be loaned out to lower leagues to get game time and to test themselves in a different group of players out of their comfort zone as a part of their development, but there does need to be some sort of restriction; be it "only a certain percentage of the number of players at a club who are under 20 can be loaned out in one season" or just "only 1 long term and 3 short term loans for players at a club who are under 20 in one season". The likes of Chelsea, Liverpool and especially Arsenal have taken the piss with buying up all the good talent and then just loaning it out.