Especially when compared with players who want to play weaker opponents in league tennis, tennis playoffs, and tournaments via sandbagging, it IS a virtue to want to play better players and challenge oneself.
I don't think that you get the difference between the incentives involved for flex league vs tournaments and team play. I haven't ever known any player who manipulated their rating to stay down a level in Ultimate Tennis to have a better chance of winning in playoffs. In USTA or tournaments then absolutely people do this. But I haven't ever seen anyone try and not get bumped- everyone wants to move up in Ultimate Tennis. (More common are people who simply default playoff matches if the drive is too far)
Once again I'm rather sure you haven't ever played Ultimate Tennis so your opinion of how the league should work is pretty meaningless.
In a flex league the purpose is to try and put everyone at a level where they can play competitive matches- people playing up at a level they don't belong is a huge problem in many leagues so I greatly appreciate Ultimate Tennis trying to make people prove it on the court that they do not belong at their current level. Pretty much EVERYONE wants to play as high as they can in Ultimate.
The only people I have ever seen manipulate the season are people who self rate too low and then will try and find the magic number where they make playoffs and move up but also where they are eligible for the postseason. I've seen people strategically default a match because they wanted to keep their rating at a certain level so that they could move up. I haven't EVER seen someone try and make sure they avoided a bump up.