The Pirates used to be able to outspend the big market teams at the amateur level and gain an advantage there. Can't do that now, because they'll lose draft picks and the ability to spend over $300K for international players.
I definitely understand why the rule changes hurt the Pirates, but I do see some logic on the other side. The NBA instituted their "1-and-done" rule because their GMs were too dumb to draft high school players. If the system devolved into clubs paying big bucks to 18 year olds, and a team like the Pirates misses on a few of them, that could really destabilize things. A guy could basically dictate, "I'll only accept $4M bonus signing with the Yankees," and hold the rest of the league hostage (not all that different than Appel).
The Pirates were overpaying (intelligently) in an untapped area. Even without a rule change, other clubs would have caught on and been willing and able to spend more in a free market. It's no different than every team now employing "Moneyball" tactics and pretty much ending the edge the A's had. There was no inherent advantage that the Pirates had in those years, other than being ahead of the trend. If anything, Boston did them a favor by changing the rules, rather than just upping their own spending beyond the Pirates' potential.