Just to be clear - you're not speculating on something that might happen in the future due to a recent change. You're making assumptions on what has actually happened over the past few years. I can't assume to know how well all teams fare when they are relegated, but in the older ages teams tend to fall apart pretty quickly when they've peaked and are dropping back down (as top players leave). I know some of our coaches of teams that are at risk of being in the relegation zone are critically focused to do anything they can to avoid that fate, as it's certainly seen as something that will severely impact, if not essentially eliminate a team.
But - keep in mind that NPL (and now N1L) isn't the top of the pyramid, so all of these teams, whether NPL1,2,3, etc., are always at risk of losing their best players every season, as they get opportunities not only with RL, but with ECNL and MLS clubs. It's not like if the teams weren't relegated, they would be that much better at retaining players - by definition, they are already at the bottom of the bracket. What it does do is make sure that teams that simply aren't competing well at this level are no longer able to do so the following season, and they can find the right competition level some rungs down.