You will have guys who are 5 star that flop and you will have 3 stars who become superstars. It is no different than the NFL, but you have a WAAAAAY higher chance of a player turning into a superstar that is a highly ranked recruit than you do if you are only bringing in 3 star kids.
And with the never ending supply of national camps, 7 on 7's, individualized position coaches, personal trainers, etc. -- the recruiting rankings are more accurate than they have ever been. That's why schools spend a fortune recruiting to bring those kids in. That being said -- D'Wan Mathis wasn't a 5 star (unless you are talking about a different D'Wan Mathis) -- he played about 20 minutes from me -- he was a low 4 star and I thought that was generous for him, as he wasn't even a good HS QB.
The kids who come out better than their recruiting ranking are usually kids like Sauce Gardner -- He was 6'1" 163 lbs as a high school senior, he ran a 4.7 40. He played at Detroit King and Michigan/Michigan State didn't even offer him. Cincy was the highest profile offer he had. He grew 2 inches in college, put on 40 lbs of muscle and dropped his 40 time to 4.3/4.4. For every 3 star who makes that jump, you have thousands and thousands of them who don't improve.
So yes -- in theory, a team could hit the lottery with a bunch of 3 star recruits at the same time, like Cincy did. But you saw what happened when they played Bama. MSU did the same when they got to the CFP, you saw what happened when they faced Bama. I can't say without hesitation -- if recruiting rankings didn't matter -- you wouldn't see the same handful of teams fighting over the same recruits at the top of those recruiting rankings and those schools wouldn't spend millions on recruiting if it didn't matter. Now with NIL -- you wouldn't have schools shellinng out a fortune for recruits if it didn't matter.
Recruiting isn't the end all be all. See Texas A&M's train wreck. You need the coaching staff as well. But it doesn't matter how good your coaching and development is if you aren't bringing in elite recruiting classes.