I can pull 4 real-life examples from what I went through with my son:
1. My son: by the time he got to HS, he was basically a 2-sport kid: soccer and baseball. He told me he didn't want to try out for the soccer team because he didn't like the game enough to do all that work and spend most of his time on the bench. That sounded a little selfish to me at first, but I respected his decision. He played on a showcase team the summers before his junior and senior years, then went on to make 2nd team all-county as a junior and first team all-county as a senior. I've said in other threads and will repeat here that it's more about the memories and experiences he got to have than it is about any financial/college return on investment, but it also worked out that he won some accolades along the way.
2. Another boy that was a year behind my son but played on his travel ball team until HS. Played on a different showcase team that was more a moneygrab than anything else, was a career backup player once he got to HS but between his perseverance and a mother that somehow was the team mom on every level he played and not quite made everything about them, he drew the interest of one of the local community college coaches and has committed to playing there next year.
3. Another boy that was also a year behind my son but didn't go the travel route, as his dad always shut things down by the 4th of July. His dad had also played varsity baseball at the same HS, so he felt he was keeping a level head about him through this whole process. The boy was a good worker and blessed with good size and speed, enough that he became the first OF sub off the bench as a junior and a starter as a senior. I don't know if he's interested in playing in college, but IMO he could if he wanted to.
4. This boy graduated the same year as my son, but played on a rival HS team. He had a lot of talent, played for arguably the highest-profile showcase team in the area and was drafted in last Spring's draft (good thing for him, as his D1 scholarship was retracted because of his grades). While he has so many things working in his favor, what may work against him at the next level is that he couldn't have cared less about his HS team yet acted like a prima donna to the point where he quit the team because the coach called him out on his lack of effort. At the time, they were in the thick of the race for the county title, but then dropped the next 2 games by a combined score in the neighborhood of 30-0 after handily beating both of those same teams earlier in the year. Normally I don't want to wish harm to 18-19 year olds, but in this case, I hope his poor attitude comes back to bite him in the behind.
In the case of my son and probably boy #4, both of them had enough talent that they would have done well in HS even without playing on their showcase teams, but other than the difference in raw talent, the biggest difference is that my son cared about representing his school on the ballfield, and I think there are kids like him in most sports who feel that club/travel ball maximizes their ability to represent their school, so that is their justification.
It's tough to talk about boy #2 because we've known him and his mother (and equally involved grandmother) for a long time and know that they mean well, but to me they're a classic example of the type of people that get preyed upon by the wrong folks in the youth sports business. While he has some talent, it's never been enough to where he's been able to really distinguish himself, and as bad as it is for me to say, his mother's (over)involvement probably kept him around instead of his ability.
Boy #3 is to me the crux of the whole youth sports agony; he clearly had above average ability and it got him as far as most kids could hope for--a starting spot on the varsity--but we are left to wonder how much better he could have been if he had played more, and in the hands of coaches who could have developed him more. There definitely could have been more doors open for him as a result of being more high-profile, but would they have been doors he would have wanted to open?
I guess I've rambled up to this point, but to me, these 4 examples illustrate that there is no one right and wrong point of view when it comes to youth/HS sports, other than the OP's point about the pain of wishing all the kids could succeed together, especially the ones you've watched and come to know over years of watching them play.