I like the comment that players who are freshman playing varsity are playing up and not with their age group. There is some truth there.
As for AAU team (from a position parent's standpoint), if a player will be given playing time (can't "Showcase" if you sit the bench) I think it's quite beneficial--was for son, who played 17U as an 8th grader, and 19U as a sophomore. Gave him the confidence that he could hit quality pitching at a young age, and run against strong older arms behind the plate. His fielding throws from SS were accurate, but naturally didn't have the zip he would develop years later. I would tell him that the field won't grow, but his arm strength will with hard work!
So in summary I am an advocate of "playing up" if you are given the game repetitions (playing time) and have ability to hang with that level. JMO