Great post, ump. I'm not sure daddyball necessarily ends at a certain threshold age or level or quality of ball. As the original poster pointed out, even MLB engages in "legacy" drafting of the boys of former big leaguers (although the Piazza example is curious since that guy seems to have earned it!).
For our family, with the exception of the one year I sat in the bleachers, daddyball seemed to end every season, usually after the first or second practice/ batting practice round. After my team parents got an eyeful of son making plays, throws and hitting, most all reasonable parents begin to get it.
Further, as a daddy coach I always made a point of moving my boy around anyways, and then reinforced this sort of "good faith" with the other parents by spending extra time with their children in remedial work, while leaving my own son alone. He stopped learning from me a few years ago at ten anyways.
Even so, parents often can't escape that basic instinct of wanting the best for their kids. I certainly don't blame them; that's why I took over in Tee-Ball eight years ago when our assigned coach clearly showed he was overwhelmed.
But unfortunately even with my own strategy, there's always one parent who'll complain to me that even though their child started on the mound or up the middle, that they didn't receive enough "reps" in practice, implying I set the kid up to fail.
You can't do much with those parents, nor can you with the daddyball coaches that do favor their sons unfairly.
I think the comment above about getting to the point of having your child play in a program with paid coaches is a salient one. I am glad that this year, my son's first on the big diamond, is under a non-daddy coach who has 14 genuine (young) athletes to teach and develop; a guy who takes a long view with the kids in his program. 10 of these boys will pitch and 10 play everywhere. It's sure to be a pleasure for me sitting in the bleachers watching tres_arbolitos play for this man, whether it's up the middle, on the mound or in the OF.
Meanwhile, I'll continue to coach at the Bronco level (11-12 PONY) with no son in the picture, and plenty a great little guys to work with.