While I agree with this in theory... I've seen too many young players in the UK get sent to a "competitive" environment in a lower division, only for them to make a costly mistake, get nailed to the bench (results are all that matters to the team they're playing for) and then lose confidence and regress.
What Hamilton needs is to play regularly, gain confidence in his own abilities, then get a shot with his parent club. If he then shows not ready, you can consider sending him out on another loan, perhaps to a higher level club than previous. But to say that being on a more competitive team will be the best thing for development isn't necessarily the case. Hamilton himself has said that playing in Wilmington has been fantastic for his confidence and development.