In the last 15 years county cricket has seen just two specialist English wrist-spinners (Chris Schofield and Ian Salisbury).
Hussain agreed with comments made by Sussex captain Chris Adams that too much cricket is played, leaving insufficient time for "practice, rest and mental and physical strengthening".
"Each year £68m comes into the game, thanks mainly to the coverage that the England team receive," he added.
"All this gets filtered down through the system to the grassroots level in order to produce future generations of England players.
"The facts show that the money, to some extent, is being wasted."
Hussain is the latest voice in the debate raging since Vaughan's comments after the fourth Test defeat to South Africa at Headingley.
Former England and Wales Cricket Board chairman Lord MacLaurin claimed the number of teams needed to be cut, an opinion echoed by Hampshire boss Rod Bransgrove.
But Gloucestershire coach John Bracewell, a New Zealander, criticised the England side for being moaners.
"There is a no-excuse environment in cricket but England haven't bought into it," he said.
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