College doesn't have promotion and relegation.What will stop them from paying off someone to put their kids in a winning team? When the kids that actually made the effort to get the team to the next level gets kicked out.
That aside, you seem to think your situation is unique, but it happens all the time with every club at every level (from AYSO to professionals). When a team moves up in class, it needs better players to compete. It also attracts better players, which makes it tough for players near the bottom who often get cut.