While there is exceptions, a lot of the kids who are very good in 12s and 14s don't grow as much, so by the time they're in 16s and 18s they lose out to the taller and longer athletes coming through, who previously weren't as good in comparison as their bodies held them back coordination wise, just how puberty works.
Some clubs, like Hawthorn have such intense development programs at an early age that they have a lot of very good kids at 12s and 14s, and there is nothing wrong with that. But it bites at the top end of 16s and 18s when they aren't as gifted athletically anymore. This is just historically, most clubs have started a balancing act in the last few years or so.
There is also a issue of differing priorities due to the socio-economic area. Hawthorn being in a well off area, a lot of the kids are private schooled and have a lot more academic pressure as a general rule, combined with the fact they have school sport at 8am coming off a 9.40pm game the night before before, something has to give. And school and school sport is one that can't give.