Also, don't forget, these "ringers" play for another team they are perfectly happy with. They will return to that team for the following season. Thus, it isn't building the team. It is clearly an attempt to stack the roster to win those last few games/tournaments at the expense of the players who have put in the work since day 1.
There was no implication of this in the OP. We can't forget something we don't know. My opinion on this topic is based on the facts that I've been given. Certainly, if there are extenuating circumstances, my stance would be reevaluated. But, given the information I have received, and the knowledge I have of the game across many levels, I stand by everything that has been posted. I am also, still, in agreement with Swampboy.
You're responding to the OP, who's clarifying it now. If these kids were brought in to win a tournament, as he now suggests, at the expense of kids who've been there since day 1, are you still OK with it?
Yes.
The kids that have been there since day 1 play under rules of the league, and rules do not disallow the coach from this action. The players (and, as an extension, the parents) should be aware of these rules. They could perform better.
A coach telling a player that he isn't performing well enough should be a beneficial lesson for the player. A motivation. A spot on a team does not entitle a player to anything more than a chance. The coach is abiding by the rules of the league/tournament in which the team plays and if a player doesn't like it, then the player shouldn't play for that team. Or, get better.
I know all that may sound harsh, but baseball is pretty harsh sometimes. I don't mean to be harsh, I'm just being realistic.