I can't say I've taken the time to watch every CEA team from every location in levels 1-4, but logically speaking, the rest of the CEA teams can't be THAT bad if CEA is able to field level 5 teams in basically every division. Those level 5 kids had to come from somewhere, and again, logically it follows that some of those level 5 kids came from a CEA lower level team. That is not to say all CEA level 5 times are created equal, but that is another separate issue.
Whether I personally agree with CSP's philosophy and where she focuses her time and which teams she personally coaches is neither here nor there; the point is, if CEA's level 1-4 teams sucked that badly, it's unlikely CEA would be able to have so many level 5 teams to filter kids on to as they get to senior age.
And, more generally, it would be near impossible to support as many gym locations as they currently have (never mind potential new locations) with a weak level 1-4 program - even with as many level 5 teams as they have, I doubt that would be feasible.