I bet all of those kids enjoy their time playing soccer even if it is not up to your standards. Maybe those parents feel good watching their kids play and getting that “crappy trophy” means something to them. Just because they are not playing on A teams and don’t have the skills you deem necessary doesn’t make their experience from participating any less valuable. That’s why various leagues and levels exist.
While I don't disagree with the statement, if you want crappy trophy, AYSO/Rec is there for those players. There's no individual crappy trophy in club that I'm aware of....
As for josep's opinions, there's a lot of truth in it, like or not. If we were in tougher economic times, there definitely be less club players. The total soccer playing population is fairly constant, meaning that year to year changes are not that significant. The club population decline as rec grows in harder economic times; whereas, club members grow in good times. The data is out there.
As for better coaches only take on higher level teams is not necessarily true. There are plenty of good coaches, especially at younger ages, coaching Flight 3/Silver/Bronze level teams. Just have to find them.
When our younger started playing club at U10, Flight 3 team, we felt that our kid was not going get on the field if we put him onto a higher tier. As such, he played most of the minutes, which was more than if he played on AYSO rec team due to playing time rotation. Is Flight 3 same as rec - yes and no. Not so simple because rec is all over the place. What you do get is consistency in the level of competition at Flight 3 and 2. Flight 1 is another matter though.
Today, the same younger kid is playing at U16 Flight 1 and plays most of the minutes. He improved over the years by having good coaching and lots of playing time. He was not as fortunate like his older brother, who now plays for a college, to jump in and start club career at Flight 1/Gold at U10 (and play most of the minutes). The younger kid had to work his way up through the flights. At any time, we could have (meaning since we pay) put him on the higher flight team but he would not have played on the field much and what's the point of that?
Why am I sharing this? Well, its hard to generalize what Flight 3/Silver/Bronze really means. The only meaningful response is "it depends".
So have your kid watch soccer to learn tactics and ball placement and movements. Have them play FIFA game too. Its a great life long sports that keep you fit and healthy, if you play on the regular basis. It sure beats running for running sake and keeps your coordination from degradation.