On the girls side, the top ranked team in most of the age groups is winning their league games by an average of 6 goals or so.
Where are you seeing this? I just looked at all the age groups in Girls (California), and while that is mostly the case for some of the youngers (2011 and younger), by the time they get to 2010 it's just not the case at all. The very top girls team in the state (2010) looks like this for past 20 games:
1-0, 1-0, 3-2, 5-0, 1-0, 3-1, 9-0, 6-0, 7-0, 4-1, 3-0, 2-0, 8-1, 1-0, 6-0, 9-1, 2-2, 6-1, 0-2, 5-1, 2-0
Going older to the 2009, 2008, and beyond, they all look similar. If at one point in time - it looked like blowouts were both happening often, and being over-rewarded by this algorithm - that's certainly not what the ratings are showing now.
It’s like watching Bayern in Bundesliga. The league games don’t tell you anything. The real information comes when they leave their small pond. (Nationals, Surf cup, Jefferson Cup, etc.)
Maybe, but this shouldn't stay that way for long, or forever. If a team is blowing away other lesser teams in their own pond, they should have a higher rating that corresponds to that. The ratings are driven by results - there is no magic to them. If it turns out they are a "fake" 48, and when they go to a large tournament against a "real" 48, they get shellacked - their rating will be affected significantly, which then in turn affects all the ratings over time back at the pond. The more crossplay over time - the less the drift; the less crossplay - the higher chance of a closed pond having ratings that are not calibrated well with other ponds.
Youth soccer rankings are a trivial pursuit for adults basically, kids just want to play the game.
Yes, and Yes. But it's adults that are choosing where their kids should play, it's adults choosing what leagues and tournaments their teams pursue, it's adults choosing/accepting how to be bracketed in those tournaments, and it's adults dealing with other adults when managing a team long-term for success of its players, the teams, and the club as a whole.
Effective ratings help those adults with useful information about all of those decisions, and they can highlight when those decisions are being made poorly. It's certainly not the only useful information - it's just data. A good coach vs. a bad coach, and ultimately choosing what coach/org is best for your child throughout their youth soccer career, has many, many factors that all need to be understood and evaluated over time.