Good point. It didn't right away because Newcastle had money due to profits leading up to the takeover. Once the PL started turning the screws to stop Newcastle by rules, threats, and actions, it had a knock on effect.
Salary cap is the only way to even it. I do see the inflation point. Maybe you have a hard top limit on transfers in a calendar year? Complete unfettered spending would be a problem, I see that.
I was just thinking. What if instead of spending limits the EPL required teams to put money in escrow when they spend to cover it? You can't spend more than you can afford so there is your sustainability. Does that help competitive balance? Not really, to get that don't you kind of have to have a low hard salary cap to even everything out? That isn't how it works with English sports. If the goal is to prevent administration then require the money to be put up front. That would require an emphasis on deal structure when selling for some teams for cash flow.
I would have interpreted that as "You can't rest on past accomplishments." If you have a bad game you are NOT suddenly shit until you have another good one.