One of the main reasons to allow Seniors to wrestle J.V. is because they may become your varsity wrestler later in the year. If they are not allowed to compete, they will not be able to improve and compete for that varisty spot. Also if the varsity guy goes down, you don't want the first action the senior sees to be in the middle of the season.
I also remember a situation in Wakeeney or Oakley. The returning state champ at hvwt was beat out by a Junior who moved in. Now tell me you don't owe that kid some matches some where. He was definitely the second best kid in the state, it just happened the other kid was in the same room.