Hendry was pretty terrible throughout his tenure. Someone gave him credit for building up the Cubs farm system in the late 90's...I don't know how "built up" it ever really was, but I do know that the Cubs farm system became the worst in the MLB during his tenure.
The Cubs had one of the highest payrolls in the MLB, and it dwarfed the other NL Central payrolls. Yet he still couldn't make the Cubs consistent winners, really. The 2003 team was probably his only team that could even be considered World Series-worthy.
The two things in which Hendry had most control, player signings and managerial hirings, were the two areas in which the Cubs were the worst. Pinella was obviously a terrible hire (most people with a brain knew that from the start), but I would argue the biggest mistake Hendry made was having Dusty Baker as his manager. Having Baker manage a young pitching staff was like having Billy Martin in charge of the 1981 A's. Baker pretty much ruined the Cubs future, and after that we saw Hendry overpaying for players with glaring weaknesses.
I would view Hendry similar to Jerry Angelo...an idiot whose teams succeeded in spite of him, and even then only had moderate success.
The farm system had a lot of depth but I think as a GM he was hamstrung by the ownership as I said above. He also had to trade away a lot of that depth to get Matt Garza, which was when the Cubs system went from top third to bottom third if that's what you're alluding to.
Hendry also had a couple of good swindle trades, the one where he got Aramis Ramirez and a later one where he traded a few broken arms for Tom Gorzelanny before he decided to suck again. He's definitely not the best, but I don't think he was absolutely terrible.
The managerial hirings I can definitely see and I concede that the managers he got didn't do the best job possible. Lou had some really cool managements before he had to quit, though (all managers have their brainfart moments with pinch-hitters, bunts etc). The Alfonso Soriano signing seemed to be a mandate by ownership, and the Zambrano signing was an overpay, but I think Hendry did well in giving Dempster, Derrek Lee and Aramis the deals they got. They produced to those contracts (depending on how much you believe in WAR$). He made a major error in signing Marmol to that extension, but the Marshall extension was great. I don't know what the fuck he was thinking giving Grabow all that money though.
Long story short (too late!), Hendry wasn't that bad. After his promotion in mid-2002 he had those three playoff teams (2003, 2007, 2008) and a couple of misses (2004 and 2009). I'm not sure how much higher Cubs payroll was than STL or Houston early on, but they didn't really ramp it up until the Tribune decided they were broke if I recall correctly. Would have to look that up unless you know offhand.
