There was only one situation where I thought the parents made the right choice in having their son wrestle in the kids program instead of the high school program. That was with a kid who only weighed 85 pounds as a very young Freshman. In his situation, there was no one to practice with (the next size was 130lbs) on the high school team and he benefited from wrestling one more year with kids in his own weight class.
However, in my own opinion, a student and parents need to support the school, not the clubs. Too many times, you see kids pick clubs over school. They say it is because there is more competition. They say that it gives their kids more opportunity and they may actually say it helps the school program. However, what they are actually doing is helping to bring down the school program. Talk to schools with weak wrestling programs and they will tell you it starts a chain reaction that is hard to break. The program gets weak and will loose support from the community and administration. The coaches then struggle to make it stronger but can't because they don't have any support from the community and administration. Kids don't want to go and compete on a team that they "view" as weak so thhe circle just continues......
We are lucky - in our area, we have junior high wrestling first and then junior high basketball. The committed kids will go from the junior high program right into the kids program. My own son even did both (kids wresling and jr. high basketball). He didn't see any tougher action in the kids program than in the jr. high until Districts.