I'm probably insufficiently qualified to have an opinion ... but it's never stopped me having one before.
I wonder if the low retention rate (of Oz gymnasts at higher levels) has less to do with overtraining at lower levels, and more to do with the separation of the elite stream at such a young age?? A lot of parents would be completely ignorant of their DDs' competition prospects until they get to the mid-levels, after which it's got to make both girls (and their paying parents) wonder why they'd invest so much time, money, and effort working toward Olympic standard skills (ie: which is what I gather Aussie level 10 is?) without ever being able to be in contention for a national team??
My observation has been that lots of the older girls seem to change over to related sports (trampoline, diving, etc) where they can still feel like they are working toward national selection, knowing that whenever they retire they'll have a sense of how close they came, instead of looking back on years in a sport where they were ruled out as having insufficient talent a decade earlier.
And whilst I can see why lots of effort is put into the "identifed talent", I'm not sure why the others are ruled out of contention altogether? The US equivalent might be only allowing girls from the TOPS training stream to ever contend for national selection.