You may be on to something.
It's pretty sickening across the board. The things kids take "pride" in are a shame. National championship jackets on kids who are competing 3 or 4 levels below their ability are an embarrassment in a so-called competitive environment. There are coaches who encourage it as well. There is solid research to show that the concept of the participation award, trophies for coming in last, trophies/jackets won in lesser divisions are more damaging to the psyche than losing. This generation of kids is the first generation in history to have less self-esteem/self-worth than the generations before them. The science links some (not all, mind you, but some) of this to these false awards. Why? Because the kids aren't stupid, and they know they didn't deserve the award.
I know this is the all star thread, but I see coaches at the high school level doing the same thing. They come back from competitions and convince their athletic directors to make multiple announcements about placements in pathetically weak divisions. When you win 3rd place in a division that only has one good team, that's not accomplishing much. Especially if the top two teams in the state compete against each other and one eliminates the other in the regional feeder comp.
It's shameful. Athletic activities used to be about developing life skills. Then they became focused on winning to the detriment of character. Then it became about winning, even if it involved cheating, just as long as you won. Now we've passed that to this era of "just win," cheat, compete in a lesser division, use kids who belong to other programs to bolster your team, put kids on your team who are aged out, do whatever it takes, as long as you WIN. That's all that matters. It's a pathetic way for adults to behave, and it's a sad set of lessons that these kids are learning. What's worse is that coaches continue to do it because of the percentage of parents who support it. They may not actively come out in support of it, but they are passively supporting it by allowing their kids to continue to participate.