Fair points. I always look upon it though that you should upgrade whoever's in the first team so they become your bench players, then your bench players can leave as they're now expendable (or if you really want to run a much bigger squad, then you can so long as they're happy). Especially when you're negotiating from a position of strength as Leicester are now and might never be again.
Sure we can come up with examples of Wolves signings (especially 2009-2012) where we've bought someone who's slightly better than one of our current back up players...great and all that but it doesn't materially improve things.