All of you have a point in some regard, but too many of us want to cover all the nuanced problems with a blanket statement. Yes, affluence changes things. Yes, we've bastardized youth sports (not just baseball). Yes, coaches take advantage of kids, tournaments, etc. Yes, competing in REC league vs. travel ball has become an issue due to the lack of skill and/or knowledge of the game. Yes, other countries are out pacing us in baseball, mostly out of sheer desperation and/or sure will to get out of their ____hole countries. Yes, high school baseball is being ravaged by this modern model. Yes, bigger cities are impacted differently than rural areas.
But it all comes back to the adults. The parents that don't value their kids' long term health, or personal psyche. The scumbag coaches that would rather make some money or promote their brand over teaching kids the game, improving their lives or helping them experience highs and lows with graciousness and respect. Dad's trying to live THEIR dreams through junior and mom's hinging their pride on whether or not junior can get the ball out of the infield.
Our kids don't know how to compete, our PARENTS don't know how to handle their kid failing (or succeeding) and several things suffer because of this.