You need a mix of both.
You don't want to just draft players with above-average skill and IQ and below-average size, physicality and toughness, as that team will likely struggle come playoff time.
But at the same time you don't want to focus too much on size, physicality and toughness at the expense of skill/smarts, as those big/tough players won't be able to help you win in the playoffs if you don't make the playoffs in the first place.
We've drafted almost exclusively for size, physicality and toughness, or as Brian Burke put it when he was GM for the Leafs - "pugnacity, testosterone, truculence and belligerence" - for many years now.
It's time to add some skill to the pipeline, otherwise we'll be at risk of failing to replace our skill players when they decline or leave via UFA, and we'll struggle to make the playoffs in the future.