The JV kids for the teams that can field 2 or more full teams are often better than half of the varsity wrestlers in the state. (hence why the 2nd teams from these programs win more than they lose) It's not just because they go to a bigger school with a bigger room, and better coaching (although these don't hurt), but because they wrestle in the off season. So to exclude those multi-season JV wrestlers to the benefit of the not-so-good varsity kids who don't put the same level of time into it, seems contradictory to the stated purpose. "Hey kid, I know you worked hard all year to get better (and have) but you couldn't crack the lineup so now you've got to wrestle JV matches against kids who aren't in the same stratosphere as you skill wise." Have fun with that.
I imagine running 3 teams has had a huge boost in the retention rate of kids at programs like Penn and Perry, and it's had negative effects on programs who have had the depth to run multiple teams but have chosen not to. Look no one wants to be JV (although we can't all be varsity) and by disguising the JV as a second varsity team (getting real varsity matches), it gives the kids pride.