Having better quality players in YL helps the development of the next rung down. For example if a SEABL club has a player who's made his way in the rotation go down and play YL games when there's no clash it raises the overall standard of the league, therefore raising the level of competition for the YL only players.

Get that Melbourne Boy. And to a degree, I agree. But have seen this happen between YL2 and Division 2. And there's also the argument that takes a spot away from another young junior to step up and play.
There's also the argument that it's encouraged to trophy hunt for the clubs.

Playing between Div2 and YL2 is good, a few teams do it, probably only one club has a D2 starter that plays down in YL2 sometimes but I don't think Wallan are winning YL2.

I believe raising the standard of each of the YL competitions by adding higher quality young players is a good thing even for the 12th player who misses out for that week, as he's exposed to a higher level of competition for the season on a whole.

Even if say Frankston had a young SEABL player who was between there and YL2M (the most extreme gap) I think it would still be good for those playing against a level of player they may not have been exposed to in the past. And if a club is trophy chasing... let them, YL is for development first, winning is a bonus.

The older system of having a team in the SCM/SEABL then a team in say a Div 2 or Div 1 allowed older guys to play in those teams with the kids.

It also exposed the younger kids to imports and vets which helped the growth while also really sorting out which kids will and won't make the grade.

YL is basically a glorified junior comp which really is a cash grab to add extra teams as outside of a few of the very top YL teams most of these kids are very average at best with many lucky to go on and play at a Div 2 level

Victoria (Australia in general) is blessed with a vibrant and large State league for basketball. Something we should be proud of.

Clubs (Associations) can take advantage of their local State leagues to suit their circumstances, their level, finances and purposes according to how it best serves them.

How they do it and how someone else perceives or interprets their methods or intentions is largely irrelevant unless it impacts on the integrity of the league itself.

We certainly do Bear.

And I agree that clubs can use it how they best see fit and suits them, which aside from an age restriction, they can do what they want. But I think it's less about development, and more results driven than anything else. I see the Youth Leagues as primarily a development league, where a true measure of success is how many players graduate into senior teams, instead of the win/loss record. Improve the players ability (to get them to the next level) and success in the win/loss column will follow naturally.
I just don't think dropping a stronger, more established player from the seniors, to chew up 35minutes and take the lions share of shots, will help his or her team mates. If a player is good enough to play up and contribute, playing down "just because they can" doesn't make sense.