I think it's fine. In the vast majority of cases, the only time you will run into this is in 14&U, where freshmen meet 8th graders. It is a tough year for the 8th graders, who have been tearing it up all season in kids and then meet up with the freshmen, many of whom have been wrestling sophs, jrs and srs, but it is also an induction for them into what they will run across as freshmen themselves next year. I think it kind of helps to get rid of some jitters about wrestling high schoolers.
By this age, almost any 8th grader who stands a chance to qualify for state is a fairly serious wrestler who plans to compete in high school, and while their odds are slimmer of becoming a state champ at 14&U, that's more true than not in the first year of any age group.
Also, for the freshmen and older kids in 16&U, it gives them a chance for some "grudge matches" with competitors who wrestle for high schools of different sizes. Maybe the 4A State Champ will get to wrestle the 6A State Champ, if their ages happen to fall in the right cutoffs. By the time you get to 16&U, with a few rare exceptions of possibly kids who were held back a year, they're basically all high schoolers anyway. For those who want more mat time and competition, more power to them!
Edited: I guess we agree, Bulldogdad, but apparently we were posting at the same time!