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.
The process were we watched these young talented players develop to become pro is comparable to building a strong foundation for these players to grow up, it's a good thing that's happening to these players because when they're mature, they become end product. Young players are not mainly used by Real Madrid because they're elite club that serves as a competitive threat to any club they faces. Barcelona is different from Real Madrid, though it depend on the coach, Xavi Hernandez picks interest in young players and build them to become pro, that's one of the reasons we witnessed the decline in Barcelona performance.