The main problem I see is that there are too many sections feeding into 1 national organization. Hannity is right about the smaller sections being at a disadvantage and those kids being forced to play basically the same opponents.
The only way this setup could succeed is to revamp the sections into 4-6 regions that incorporate 4-5 of the current sections. Geographically, you could do something as simple as northeast, southeast, northwest, and southwest with the Mississippi river being a boundary.
This Current setup is very risky. It doesn't take much to see the politics of the PD program influencing it.