I feel safe in saying that any program that consistently wins the highest competition in its system is most likely not representative of the system as a whole. As with doctors, half the music programs have to be in the bottom half. And that's not counting the ones who don't even have music programs, much less compete. I say this as someone who went undefeated in jazz band competition for three years in junior high, including two years competing in national competitions against high schools.
I heard a few years ago that a group of parents got together and got the band director fired because she had the nerve to hold auditions for the jazz band. I probably wouldn't have liked being told I wasn't good enough for the jazz band. But I also wouldn't have liked knowing we could win national competitions, but didn't qualify for them because the band director was required to take anyone who wanted to play. Yes, this is the exact same argument parents have over sports. That's why I see both sides of the debate.
The only solution I see to participation in competetive activities is at the league/organization level. Either every team has to take anyone who wants to play, with guaranteed minutes, or every coach/director/etc is free to hold tryouts. But there will always be activities with more people than minutes. Expecially when you factor in drama competitoins. How do you let everyone participate when the play only has three roles?