Do not blame Real Madrid for not giving Kubo playing time, clubs like Real Madrid don't use most of their academy players. Real Madrid likes using already-made players, so they can be a threat to other clubs. And that is the footsteps Manchester City has taken, and they are becoming with it.
Players who come from the academy are only used by Real Madrid after they loan them to other clubs. It was an opportunity that Real Madrid gave their young players. While at the loan club, Real Madrid will see the player's potential to be included in the main squad after the loan period is over.
The process carried out by Real Madrid is also carried out by many other teams. Maybe Manchester City does too.
I think there are only two teams that use a lot of players from their academy, Ajax Amsterdam and Barcelona.
Barcelona is no longer used to young players, but since Xavi became coach, they have become accustomed to this process again.