I have to say, I think you have it completely wrong to be honest. Playing on "smaller" pitches regularly means that a player's technique is more on show because you don't really get anywhere playing long balls etc, the players with the best touch and control get noticed. This has been clear with players like Welbeck, Petrucci and Morrison who have all looked a cut above the rest on Academy pitches (which aren't even that small) as the slightly smaller area means that their ball skills are more on show. That applies for loads of things in a more confined or concentrated environment.
Also, I'm pretty sure coaches here in England have started playing youth games on smaller pitches and 5-a-sides - holding back on allowing young kids from playing on proper, full sized pitches so that their technique, control etc improves before they adapt their game to the bigger environment.
Although it is my own fault for not not being clear enough, you have misunderstood the point that I am making.
Small pitches are used for developing very young players between the ages of 8-14 years old. However, the other crucial aspect of those techniques which you have alluded to is that they include small sided games. The intention is fairly clear. The more often you are able to touch the ball, the more natural possession of the football should become. This has been known for years, and it is a good thing that it is now being applied in England, even if it came very late.
However, that doesn't necessarily translate to an 11 aside competitive fixture at U18's level, because the players are at a completely different developmental stage: for example, a players core technical attributes are not going to dramatically improve between the ages of 17-18, which is why those techniques are used mainly at an earlier age. And in any case, the pitches are easily big enough to play long balls if you so wish, and it being an 11 a-side game, the number of touches are going to be similar to a first team match, so the comparison is misleading.
It's important to think about what the actual goals are at the different stages of development. Players that are between 16-18 years of age are starting to prepare for a professional career. Their core technical attributes are already in place, even if they have not yet fully matured, and you are attempting to encourage them to express those talents in a real football environment.
I have a post about this that I started a few weeks ago but haven't yet finished, but as we are talking about it, I might as well explain roughly what I believe. There has to be an optimal (range of) pace and physicality which best encourages players to express themselves fully. If it is too quick and too physical and there is too little space, it won't matter how technically gifted you are, because far too much of an advantage has been afforded to the players who are often less technically gifted, but are athletically and physically impressive. Those players and teams will be able to close you down and place you under extreme pressure, meaning that (especially) young players will find little encouragement to try things, for fear of losing the ball and conceding a goal. That doesn't matter at other stages of development, whereas it becomes more and more important as you mature in to a professional.
As an example, even Lionel Messi can struggle in games where he is double and triple marked on smaller pitches. He is obviously still more talented than everyone else, but it makes no sense to think that he can express himself fully in literally any situation. There has to be optimal conditions where you are able to see Messi at his very best, while still retaining a competitive edge to the match.
Another example is Spanish football, in general. It is almost unquestionable that La Liga is a competition that encourages technical ability and skill and possession of the ball more so than the Premier League. But why is that? The kind of players that La Liga attracts in comparison to the Premier League is one reason, of course, but many players that have played in both have admitted to these differences — and I believe that for some players, at least, we have seen it with our own eyes. So, it is more than just the players. I have my own theory, but what it comes down to is largely cultural. La Liga is a slightly slower and less physical league that rewards technical ability more so than in England. That isn't really a controversial point of view, either.
So my overall point is that you cannot expect 16-18 year old's to perform miracles in any situation. There certainly does need to be a competitive environment where players are challenged, but there also has to be a point where the environment becomes detrimental, even for the most talented players in the world. And let's remember, even if United have one or two of the more talented players in that age group, that leaves another 12 or so players out of a squad of 16 that are not necessarily as talented.
You cannot expect players to pass the ball like Xavi and Iniesta and Fabregas, or to be even half as skillful as Ronaldo and Messi, if the majority of games that they have experienced are low on technical quality and highly physical, with lots of crunching tackles, and where possession changes hands every five or six passes. Hence my remark that practice makes perfect. That not only applies on the training ground, but also in a competitive game environment.
As I experienced myself as a footballer, it's possible to be able to perform all kinds of tricks and skills during a training session, but never have the same opportunity during the first few years of competitive matches. And if that is the case, a player will concentrate on the things that you can do in a competitive match in future training sessions, because at that age, you are desperate to impress in that environment, more so than anywhere else.
So it shouldn't be surprising that the English players that make it in the Premier League are often of the type that we generally see. That's all that they know, after all. There is clearly far more to this problem than I have outlined, and I haven't mentioned the possible solution, which is what my post in the making is about, but if it was as beneficial as you seem to think, why haven't the countries that do regularly produce the best players in the world come to the same conclusion?