Personally, I think the kids who are only competing for medals and trophies or their parents who push for that are probably going to burn out in this sport. It's a bit like swimming, where at the end of the day only a few kids will be recognised on the podium. At some point they have to learn to set their own goals. When my daughter was first on team, her coach had a little notebook he carried at each meet. If the girls did what was expected on the apparatus perfectly they got a five point star. It went down to a four point square and then a three point triangle. For most of her couple of years with her, it didn't matter whether she came first or didn't pick up a trophy, she just wanted to get four stars in his little notebook. The kids didn't even want to know what their scores were, it was all about the notebook.
I think it's been good, because my daughter now tends to set goals about how she goes or making a team, rather than getting a particular score or placing. It's often when she's working towards the goal of nailing her routines that she does her best anyway. Last year she had to compete with 100 other girls to make a team of 8 for nationals, and the competition was over 2 days. She was in 10th spot after a tough first day, and had a rest day in between. She came out on the second day with the 2nd highest score of the day, and was the 6th person onto the team. This sport is not a kid's sport. The mental toughness demanded of such young children is punishing.
I like that everyone can get something for trying and improving, but once you get to Level 4, I think they have to learn to compete for something other than prizes. Don't get me wrong, the days that they win prizes are pretty special, but they have to have a reason to go back to the gym on Monday other than because they got a medal on the weekend. Otherwise the off season can seem a very long time and every injury can be that much harder to come back from.