I think that after the Kings failed to sign a few junior league prospects two years after their draft years (which happened with Matt Zultek and Justin Papineau), the organization felt burned in using high picks to select prospects who could walk away within a couple of seasons, so they seemed to favor drafting more and more collegiate and European prospects.
I think with Zultek, the Kings knew they would get the 43rd pick in the 1999 Draft as compensation for not signing him. Sometimes teams decided they'd rather have a redo than sign the guy. As I remember it, Zultek's play hit a plateau in juniors and he'd get re-drafted 56th in 1999 by Boston.
I don't remember the circumstances with Papineau in 2000. His D+2 numbers were down from his D+1 season. Papineau was redrafted in the third round and the Kings bypassed him in the second. 1999-2001 also were very heavy European years from what I remember but that was more because of a lull in American and Canadian talent. Back in those days, the NCAA guys had to wait an extra year before entering the draft. So along with having their rights for an extra year, maybe there was a sense that you had a better idea with what you were getting out of a 19 year old.