I completely understand your perspective. I have no idea of your experience in athletics, and I am in no way saying that you're wrong, but in my own experience, the big fish/little pond comparison is very relevant. I've been coaching at the middle school level for over a decade now, and I've seen this happen as kids move on to high school and even followed my students' progress on on to college. There are kids that dominate across every sport in middle school. After two years of praise and attention at school, and sometimes from their outside school activities as well, they begin to believe their own press.
Then, when they get to high school with all the stud athletes from the OTHER middle schools that feed in, they are no longer the best. Some learn to fight and work hard, while others fade back because now they can't dominate like they used to. They dont know how to really push themselves, because it's always been easy for them, and it only gets harder from there.
I firmly believe that is one of the reasons CGMFP has been so successful with the 2-3 star kids in the past. They are hungrier than the higher ranked kids. They play with that famous Patterson chip on their shoulder because they know what it's like to struggle for their spot.
I would rather take a kid who has had to fight his way up through the ranks and learned to struggle than a natural athlete that has dominated solely on his natural gifts.
Of course there are the unicorns of sports, those kids that have the natural gifts AND know how to out-work everyone around them. There are over a million kids in high school football, but by the time they reach the next level, and the one after that, it has been whittled down to thirty-two 53-man rosters. From over a million to just under 1,700. Those aren't the big fish in a little pond, those are more like sharks in a pond.