St Cloud and tUMD are unlikely to win head-to-head...

All other things being equal.

But all other things aren't always equal.

Sometimes those schools can offer a full ride, when the big school can only offer a partial scholarship.

Sometimes those schools do a better job of scouting (see Adam Gaudette, who I believe was passed on by BC and BU, but not by NU).

As with football players in Texas, there are a lot of talented hockey players in Minnesota. The Gophers can't take all of them, so there are still a lot of very good players around for St. Cloud, Duluth, Mankato, etc.