Ya see I believe that Ice Hockey has the answer as compared to all of these other sports that kids compete at, although I hear (not being involved myself) that Soccer has a similar way of breaking the kids up.
In hockey we have "House" which at one point when there were less rinks and associations, leagues literally meant like a "Resident" it was for teams that stayed "In House" that one rink, association and the teams were all of the kids how joined up, evaluated at the beginning of the season for a couple of nights with rating charts and run thru drills and some scrimmage, to then have the coaches with an administrator basically run a "Draft" from top to bottom and reversing the order now and again, and even reviewing the rosters to make sure that all of the teams were as evenly matched as possible. As the kids get a bit older this gets easier as we start to know the kids who return again and again... This is like what most of you consider "Little League" you pay, you play and that is sort of what it should be and when done really well it really can work out great, you've got to keep the morons away from it and make sure they don't run house the way the top AAA travel teams are.... But in house the kids really should basically rotate thru evenly and all get a chance to develop. And one thing we have learned at USA Hockey and Hockey Canada, that sometimes the kids who look great younger don't always make it as they grow older, and at the same time, some kids really do take longer to find themselves and if given some time, many times it is those darker horses that actually do come from behind and start eating the league up and become some of your top players... It is wrong to overly track them especially at the house level, that is what house if FOR for developing the kids and hopefully having some of them learn and develop enough to move up to the more competitive levels of AA or AAA travel hockey....
And that is where we have Real try-outs, not evaluations but real competitive try-outs and again the morons can ruin this with selecting his kid or your kid regardless of ability or there were enough kids to bump the other kid who was put into the line-up on politics and the like, happens WAY too often. But at least we have the fun, and yet still very competitive and high energy house situation, which really can and does act as a feeder system for the travel teams. And the AA are feeders for the AAA teams and many of those triple A teams are just a complete food fight of egos and other garbage that it is almost certainly better to have most kids do double or house and stay away from the triple unless your kid really is THAT GOOD...
And with travel comes the understanding that this is competitive and that the coach is expected to run his team the best way he sees fit and to WIN as often as possible. And if that means riding his horses all the time, then so be it that is his choice and if he shorts his bench and some kids ride the bench that is his choice too. I still don't completely believe in this even at the travel level as I believe hockey is a great team sport and if your kids really do put out as hard as they should, then you should need at least 3 full lines and two or three pairs of Dee to keep everyone putting out over 100% each and every shift. Now you might have better shadows and better Penalty Killers, better Power Play lines and guys but many times you can divide that up and give each kid a badge and role to own and wear proudly on his chest because that allows you to coach more effectively and more strategically, so you still don't have to be such an idiot about it, running two lines over and over again and wearing your top lines out and keeping the other kids from learning developing and perhaps one day becoming your next great player... Great shot blockers and penalty killers can lead a team many times better than any single sniper can. Every team needs some hard nosed "Lunch Pail" kind of players to work hard, tie up the other teams good players and neutralize them to then allow you to hopefully counter punch with your top line against their 3rd line that wasn't as well developed and was more myopically taught and coached.... And at the end of the game hopefully your team will have more gas and more team spirit left on their bench and in their gas tanks too.... because you shared the work load more evenly and you have three pretty decent lines that can all go out there and get the job done....
Not everybody can be the best shake and bake stick handler and sniper but almost any healthy athletic kid can work hard and skate hard, and use his head to play smart and shut down the opponent and perhaps get some nice dirty goals by forechecking in their face to force mistakes and turnovers and crazy all messed up on their end plays in front, crashing the net to make the other guys life harder.... And that keeps your snipers and talented ones from resting on their butts thinking their stuff don't stink either.... Now these other guys are out there causing trouble and turn-overs and driving the other guys nuts, so now they too have to keep skating hard, working hard, get their noses dirty and not simply be full of themselves "Stars"..... Done right it really can and does work....