My understanding from talking to people who have been involved in club soccer for many years here is that club soccer used to be like this. To make it onto a ‘top’ team (or even to make it onto any club team), you had to be a very good player, otherwise you just played AYSO. Not sure how accurate that is/was?
In San Diego in the 70's, it was local rec teams (not even at the AYSO level of organization) with a County Cup tournament at the end of the season, or try out for travel teams -- Nomads for Boys and Surf for girls (San Dieguito Surf, to be exact).