Yeah one of the worst parts of the host thing is teams know exactly what year to go 'all in' on. Saginaw had a good team last year, and traded away their best player in Pavel Mintyukov to essentially punt their '23 postseason, because Mintyukov was an '03 and would be in Pro Hockey for 23-24, to help give them the capital to load up for 2023-24.
It's a bad system and needs to be re-worked. I don't know any scenario quite like that, where a certain team is just guaranteed a spot a year and a half in advance (and earlier than that, teams start preparing their bids and likely have a good sense of who might get it due to the rotating nature). It's especially bad given the age restricted and thus predictably flipping nature of a sport like junior hockey.
Saginaw probably does that trade regardless of whether they were hosting the Memorial Cup. They didn't even break 80 points during the regular season, and two of their best players were 15 and 16 year old rookies. Its not like they had a veteran core at the end of their cycle that needed a couple of pieces to put them over the top, like Peterborough did. Yes, they did win one round, but it was against a pretty bad Flint side, and it still took 7 games.
Its hard to hold on to one of (if not the best) trade assets in the league to maybe win one more playoff round (I doubt they would've beat Sarnia even with Mintyukov) when you can get a kings ransom for him to build around instead. Guys like Misa and Parekh were untouchable, so they didn't have too much in the way of young talent to help with buying veterans at the deadline. This situation happens almost every year in the CHL with teams that are borderline contenders. Its a calculated decision that sometimes works and sometimes backfires (see Halifax with Elliot Desnoyers). When the bulk of your best players are eligible to return the next year, you'll often see GMs sell. Conversely, if your best players are 19-20, and/or likely to make the NHL/AHL the following year, GMs usually add (always exceptions of course).
I agree the Mem Cup hosting system certainly isn't the greatest as it can cause some programs to really bottom out after hosting, but I don't think the example you cite above is necessarily the best one.