Doughnutman:
The answer to your question is hard and easy. The quality of high school ball in Arizona is generally on the upswing, and this is due mostly to a dramatically increasing population more than to the increased amount of travel.
I am not even sure what constitutes travel anymore anyway. It used to be team that traveled to CA on a regular basis, which is not required today. There is more than enough competition in Arizona.
What I suspect you mean is the ability to go recruit players without geographic restriction (as is allowed in AABC -- Connie Mack, Mickey Mantle, etc) as opposed to the restrictions found in LL, Babe Ruth, American Legion etc.
All that said, it is not a straight-line progression. I have seen individual high school teams (Horizon, for instance, with Tim Alderson, Kevin Rhoderick, Tommy Joseph, etc and Brophy with half the current ASU starting lineup) that could beat any travel team I have encounterd. I have seen all star teams of the best players in the west stumble miserable in the Junior Olympics while some "rec" teams with a few key additions have finished in the top 5.
The 1993 Chaparral state championship team that featured Paul Konerko, another top three round draft choice and a whole lot of very successful college and professional players could pound any Arizona travel team you could put together today if you could magically transport them in time, and that was not close to the best Chaparral team.
The 1999 team with Matt Abram and Ryan Hubele and Brian Bannister and a bunch of other truly great Pac 10 and professional players undoubtedly would have won more often than not against the teams that featured Austin Yount, Ike Davis, Jason Jarvis, Charles Brewer, Adam Bailey and Kyle Williams (among others). The first was a rec-based team, the second, which included my middle son, was a team totally steeped in travel.
So, yes, the depth of talent in Arizona has improved but it has more to do with a population that has doubled than with the advent of travel baseball, which has destroyed as many players physically as it has enhanced. The best players today, however, are no better than they were 10 or 20 years ago.
As far as coaching goes, I have seen travel teams with some of the best coaches I have encountered and some who are worse than a disaster. But the best coaches I have ever seen below the college level (and maybe including the college level) are high school coaches like Jerry Dawson, Eric Kibler, Gaetano Giani, Scott Richardson and others of that ilk who simply do not care where a player came from as long as he can play. And, if they see talent, they are all very willing to develop that talent if required.
Obviously the best players will gravitate toward travel teams. But it really is not important below age 13 (at the advent of the bigger field) and that 13-year old season is sheer misery because of the transition that occurs, a transition that sends some of the former "stars" to the scrap heap and tends to greatly reward the smaller guys who suddenly grow.
You are giving too many of these travel guys (and I have been one of them as enthusiastic as any) too much credit. There are many, many effective ways to learn to play well.