He was saying it in regards to new clubs coming in not existing clubs. Generational support can only be built over time! Any new club, be it now or from one hundred years ago, started from nothing and grew. Out of the current expansion bids there is only Bombers you would arguably attach the plastic tag to due to their lack of grass roots involvement in the bid but even then would you call Storm a plastic franchise even though they have a bigger supporter base, better income and are more valuable to the NRL than most clubs that have been around a lot longer?
In the ideal world yes you would just keep expanding the number of clubs and have the financial resources, corporate support, fanbase and player pool to do so. Back in the real world the NRL is telling us those things don't exist so expansion can't happen. How long do you give the existing clubs to be what the NRL wants them to be and how long do you leave more lucrative markets barren whilst that happens? Not easy decisions as either way the game loses out.