Yes they can travel next door at be within the travel limits. Sure that does open up for some good neighbor competition, but they are limited in which events (especially tournaments) in those states they could attend due to other top teams that could possibly be be invited.
Your examples of travel are great and I agree in some cases we could take advantage of it more. But some of those trip are hard to justify to the coaching staff, parents, and administration if you only end up seeing one top national team there due to a few of the other team traveling too far. At an Illinois event in addition to some good Illinois teams, solid teams from Iowa, Minnesota, Missouri could travel to Illinois for an event but due to the travel restrictions we may not be able to attend (again especially tournaments) if one of the teams is outside the distance. At an Ohio event in addition to some good Ohio teams, solid teams from Pennsylvania, New York, and Maryland could attend but for the same reasons and IN team would have to decline.
Again, yes its not most IN teams and its not completely shutting us out, but it is limited some of our better teams from being able to see what other top competition is out there and showcase some of the team and individual talent we have. Just due to the simple fact those other teams are travel from someplace else.
If the travel restriction was modified to exclude the distance of other teams, a top team like Brownsburg could be invited to a Illinois event that would actually a reasonable distance away. And at that event Brownsburg could showcase their team and individual talent against a couple nationally ranked teams that came from Illinois, Iowa, Minnesota, and/or Michigan. Since that event was able to bring in a couple big name schools the coaching staff and admin. could more easily justify the a out of state trip. If they do well it is more likely they or the next big name team from Indiana will get a similar invited to a good out of state event in the future. Plus, since the event is adding yet another big name team it is more likely other top national teams would be interested in attending that same event in the future as well. Being limited by other state travel distances doesn't effect most teams but it does limit the chance for some of Indiana's top teams to test their team and individual talent and get them and the whole state some more recognition or college recruiting attention.