As far as I know Greg, that is just how it is. It is just like having buys in the State Wrestling Tournament when good quality wrestlers could have filled them. For example, and this did happen a couple of years ago -

Dist W (2 wrestlers)
Dist X (2 wrestlers)
Dist Y (4 wrestlers)
Dist Z (8 wrestlers).

Dist Z is the only one where kids will have to win two matches to make it to State, whereas, in the other three in this example, mutiple wrestlers may get in without winning a match - including Subs. Now you have a sixteen man bracket with four buys in it, while four wrestlers from Dist Z, some which are likely as good if not better than some of the other wrestlers from the other Districts, will be sitting at home instead of being allowed to wrestle State.