I don't know exactly what is happening, but there might be one situation where it might make sense. If the middle school wrestlers are "novice" wrestlers for the most part and the club kids are the better wrestlers, the club wrestlers would not gain anything by participating in the middle school program and it would free up the space for new wrestlers. But when it comes time for league, or whatever you call it, the best wrestlers all wrestle, middle school or club...

I know this statement will rub some wrong, but wrestling really isn't a team sport. It is an individual competition and and the focus is on individuals, not teams. So trying to get the club kids "on the team" isn't going to work because those club wrestlers already know what's going on and they know they aren't in a team sport. If they want to improve, they need a good coach, a good partner, and good competition.