I'm gonna be honest, I hated the increase in divisions that worlds had. I was able to buy XS at the beginning because it was reserved for smaller gyms who due to having a smaller pool could finally field a worlds team, but then it turned into the bigger gyms who already had the talent just going "oh cool guess we can field an extra team." And then restricted and NT came into play. NT only made sense in the HS setting since sometimes states or schools would restrict you from tumbling, and for years people who weren't the strongest tumblers could sometimes get a team spot just for their stunting ability.
I think it should go back to level 6/7 small, medium, large, and the separation between coed and all girl of course. No restricted, no NT. Those could potentially be moved to summit.
I think most of us would agree with you from strictly a competitive sport perspective.
However, solely looking through business eyes:
1) More divisions make it easier to manipulate numbers for venues and number of days needed.
2) Less depth in divisions is easier to score.
3) More athletes attending World's means a higher number of happy gyms, coaches, athletes and parents.
4) More divisions means more winners, again, more happy people.
5) Less depth in divisions means more athletes going on to day two, more happy people.
6) NT insures highly talented athletes can continue, or keep developing, in the sport at/to level 6 whether blocking, injured, aging, or stalling. More happy people, and personally, I love watching NT, there are some incredibly talented teams.
7) More divisions provides more talent across the top versus a lot of depth with less talent.
8) Parents can more easily justify spending thousands to fly their athletes domestically and internationally, even when they know their kid's team isn't going to win, when the division has 25 versus 100+ teams.
9) More divisions equals more SM coverage and interest from family and friends.
Ultimately, AS is an extremely expensive youth sport with very few scholarships. That combination makes it a business of filling venues and making people happy first, before it can even consider what's best for the sport on a more professional level.