Absolutely. If you have what it takes to play college baseball it will show in the form of present ability. You don't have to play varsity as a sophomore. My son didn't, and he's playing in college.
These college coaches know there are many factors involved with "playing varsity", including many baseball factors, such as program philosophy, older players who are ahead of you who may be better (for now), and even non-baseball factors, like politics.
But give your program the benefit of the doubt. I'm sure they have your best interest in mind. Don't give up, or even be worried, just work twice as hard as anyone else on the team. It'll work out for the best.