TR and infielddad - I can really see both sides of your discussion and I think both have a lot of merit.
On the one hand, a showcase can demonstrate raw tools...pitching velocity and mechanics, hands, speed, feel for the field, hitting mechanics. Coaches draw a lot of valid conclusions about a players ability and potential.
But on the other hand, game situations demonstrate the intangibles and knowledge of the game. Perhaps more of the player's "makeup" is on display in a team siutaion. A player's ability to do the small things...some of which infielddad has pointed out.
It seems to me that both are very, very important. And I keep hearing that college coaches are getting back (at least a little bit) to evaluating the intangibles. There is one such program in our area (Univ. of San Francisco) that has done very well for itself by sticking to this method. They don't land a lot of "blue chip" recruits, yet they compete...they are well coached and TOUGH as nails on the field. They work hard to identify those local kids who have grit. And with that approach they made the regionals last year despite a small budget, shaky weather and a below-avearge D1 facility.