With a flight 1,2,3 model you wouldn't have discovery level teams playing bottom Flight 2 teams.Just had this debate the other day. I don't think its quite that simple. Example If you took the top handful of what i guess would be Discovery teams and put them against or compared to the bottom handful of Flight 2 teams (that's assuming we just throw all of Flight 3 back into Rec) I think there's about a 20 Goal differential and more than 1 level in between those 2 groups which is what would be separating them in your plan.
Right now, SoCal League lists 104 teams in the 2004 age group.
Set it up like this:
28 Teams in Flight 1 (Set up 2 divisions - North and South with 14 teams each)
50 Teams in Flight 2 (Set up 4 divisions by geography - LA, OC, IE, San Diego)
26 Teams in Flight 3 (Set up 2 divisions - North and South)
The math doesn't quite work perfectly for an equal number of games - But you get my point. And that point is that most teams are really Flight 2.