WWE wants all wrestling fans to watch their product. Since they'll never really get the indy audience with the product they produce for TV, it's a good plan to focus NXT on appealing to that crowd.
It sucks for independent promotions trying to earn a living, but hopefully the closer they come to direct competition, the more it'll push both sides to improve.
I haven't really seen much of Michael Elgin, but I've heard good things and wouldn't mind seeing him in NXT.