A few things: Firstly, although LV has had several transfers, they are an outlier. You haven't seen that on the girls side, and you haven't seen that on the boys side outside of LV. Yes, there have been some transfers, but seemingly nothing en mass or out of the norm. Secondly, I am pretty sure many states have rules against 'recruiting' from other schools. These "power hungry coaches" you speak of would be shooting themselves in the foot if they were caught doing it at the state level. Thirdly, the desire for these coaches to do what you speak of already exists with or without NXN - the competition wouldn't be as brutal without NXN, but the same impetus remains. I don't think this is a realistic problem on the whole.
Rolling back the clock and going back to the NTN format, turning it into an invitational instead of a championship meet, but instead of taking the best teams in the nation (some of which may be runner-up at state, such as numerous NY girls teams over the years) they are limiting the pool to state champions? I'm not sure that's a step in the right direction. The regional format allows for teams to prove they belong in that national field, and allow for the best 2-3 teams (at minimum) are represented at the national meet. Further, I imagine it is more difficult to seed a national field than it is a regional field, since regional teams are more likely to have faced each other.
... LOL ... just .... LOL ...
Anyways, regional meets allow for more kids to experience that caliber of competition than would otherwise be impossible, and can create excitement for the programs that attend and raise the 'standard of excellence'. That's a good thing for the sport.