Here in NJ, we have seen an exponential growth of "Select Teams". My son's 12U Select league this past spring had 33 teams in it, spanning our small state. 3 Years ago, this same age level had 8 teams. It was by far the most competitive league of the 6 or more that I knew of, at this age level in the state. ( totaling over 100 teams) That being said, there were just a hand full of really good teams. They beat up on the weaker teams and the final standing were very lopsided.
I saw several teams that were true daddy ball teams. You know, created so the managers son could play short and pitch....... Many teams were formed by coaches who were booted out of local rec leagues because they were idiots or worse.... ( see my yelling coach thread
) Of course there are several teams created so these young players could compete at a higher level as well.
There is no doubt in my mind that the talent has been diluted, but it is still more competitive than the local rec leagues. In fact it has made the local rec leagues more diluted and the level of play has gone down drastically since many select players choose not to play rec. I umpired some local rec 12u games that were frightening. There were teams with players who could not throw or catch. I was very afraid for there safety.