You have it upside down. The explosion in club soccer was never caused by the elite players. Many soccer clubs have been around since the 70s and back then high school was an option for recruitment. The explosion of 3-4 teams were caused by the middle players. AYSO began with a philosophy that everyone should play together from the elite player to the handicapped kids. But the parents of those middle players, particularly those with college aspirations, got tired of the product AYSO and other rec programs were offering-- coaches that didn't know anything about the game, players who couldn't connect a pass, and AllStar programs that were increasingly political. The AYSO core program didn't appeal to these parents, who now were being exposed to even low levels of professional and high school soccer and sort of had an idea of what the game is supposed to look like (such as during the US World cup), even if they were foggy on the details. AYSO was wedded to a uniquely American perspective that kids shouldn't be tracked and sorted (which is why before magnets were introduced our public school systems are organized the way they are) and that everyone is equal. AYSO was the victim of its own bad product, and a philosophy which became outdated as the competition pendulum swung. Hey...parents are now even paying people to coach their children in fortnite, so when hypercompetitive parents crash into an egalitarian philosophy with a bad product, this was bound to happen. Apparently these fortnite coaches are making more than some soccer coaches.
https://www.businessinsider.com/fortnite-coaches-2018-7
That's why if we care about the participation rate and having a broadbased participation, having multiple levels of soccer is a good thing.