Well it depends on what argument you're making: actual local players (Johnson, Carrick included) or just Newcastle players? Forster, Caldwell, Chopra, Orr, Ramage all played/play at at a half decent level.
To be honest I don't really pay attention to many of the academy kids that other teams churn out so I'm not sure how many of them end of the Championship or whatever but in terms of decent first teamers we've done alright and that's the most important thing, unless you get half decent money for the failures (more often than not you won't - most are actually just released).
The academy has improved massively under Ashley anyway, we'll have more first teamers from the academy soon enough.