Here is my take on it.
I don’t by any means think L10/college/elite is the best goal or best way to run every program. Focus on stron rec and Xcel is generally more healthy in almost every way (including the financial health of the gym), but if the question is about being best in JO, and you are a bit crazy like most of us, I think the bottom line is usually to do everything with the end in mind.
I think the best gyms (defined as producing the highest percentage of successful L10/college/elite gymnasts) raise their own gymnasts up from the beginning with the right form, basics, conditioning, work ethic, team spirit, character. They also create a balance of pushing/holding back so the gymnasts don’t burn out.
These things, when done right usually produce good compulsory teams, but not the kind that sweep the podium. The time that has to be wasted on detail to text error, and hand position at the young compulsory age is just that, wasted. The effort for a 7 yr old to have 38 AA is generally not benefitting them in the long run in terms of great skill basics, just a short-term 1st places.
Fantastic skill basics get you into the 37 range, but there is always a team out there willing to drill their L3 team (or, God forbid L2) into the 38’s. I think it isn’t worth fighting that. A good program (meaning one with a long-range view) will hold out and get solid basics and proper uptraining in place to win at the optional level. I think the good ones are willing to sacrifice scores a bit at L7, L8, and L9 to make sure the girls are uptraining appropriately as individuals and competing the skills they need to prepare them best for the next level.
Instead of competing bare minimum to win L8, and then panicking b/c they can’t pull L9 together over a summer, they will let the girls compete whatever skills they have ready (truly ready, and individualized for each girl) so they get the maximum competition experience to benefit them in the long run...again assuming the long run is L10, college or Elite.