The state tournament officials are selected based on recommendations from the four districts. Generally, each district sends five officials to the tournament; presumably, these should be the best officials that district has to offer. I can't speak for every district, but I know that at least two districts, including District 4, base their recommendations on votes from the clubs within the district. (Will, I think that whoever told you it was one person's discretion didn't know what he/she was talking about.)

I'm not going to try and make a blanket statement about the quality of all 21 officials. There were a few that I thought were of questionable ability, as well. However, as a former district director, I can tell you that it is like pulling teeth to get clubs to vote or state their preference on officials. Nobody wants to take the time to evaluate and recommend the best officials ahead of time, and after the tournament has begun, it is too late.

My recommendation is that you take some time next year to watch the officials during the invitational tournaments. Every Kids certified official has a number assigned to them, which most wear on their sleeve. Don't just look at the bad officiating, but also look for the exemplary officials. And then, when early February rolls around, encourage your club directors to vote on those officials that you were most impressed with. That way, the officials who showed that they are the best during the course of the year will be the ones honored by an invitation to the state tournament.