To start, Billingsley didn't transfer, he was dismissed for a number of reasons I won't discuss. If IMG didn't come after Griffith and Brown they would still be at MC. To answer the question, yes they will still compete. They have dynamic QB in Alec Thomas, a D-1 linemen in Jeremy Cooper (Cincinnati) a returning RB in Nakos (10 TDs last season) and 8 starters back on defense.
People have been transferring out of MC for many years...Charles Frazier, Pierre Thomas, Reginald Cribbs, Lendell Buckner, Leon Hill, Mike Griffin, and many, many others...there are a wide variety of reasons...some is playing time...many is due to the discipline and structure...many of these kids are attending a Catholic School for the first time, where attendance is required, where a C average is required to play, where actions have consequences and they don't like it, so they go to public school. MC will kick you out if you aren't living up to the code of conduct. Tuition plays a huge role. When you recruit heavily out of areas where kids are experiencing Catholic school education for the first time, you understand that some kids are going to not stay 4 years, and you have a plan B or C in place.
As far as the offense, I don't buy it. People may be not going to MC because of the offense, but I don't think they are leaving, they don't hide what offense they run. This offense works. They won 12 titles, as recently as back to back in 2012 and 2013, and semi finals in 2014, they scored at will last season, they just couldn't stop anyone and that needs to be their major adjustment in 2017 and beyond.