If you a "freak" of nature, that rare talent, then yes play up.
For the rest of the mortals:
The USTA with all the changes and modifications to draw sizes, forces a lot of juniors to play up.
I think that is a shame for many reasons.
First, tennis development is a bunch of little steps, and I don't think they should be skipped.
It is much harder to be expected to win, to have a number on your back, to be one of the seeds and go out and prove it and win.
It is much easier to just show up, and if you win, great, and if you lose, no big deal.
Tennis is a mental game, and you are skipping the whole step of having pressure on you.
Second, for the littler kids, it is hard to hang onto good technique in a match.
You can end up resorting to sloppy play,
and being the little kid trying to beat the older, BIGGER, kid puts you in a defensive position where you rarely get to be aggressive.
Also, Rina had a great point about losing, if you play up and are not successful, that can become your mind set.
I know the 8's , 9's and 10's are in a difficult spot.
But, I would think it would be better for the long term development to organize your own matches
with other kids of the same age and PLAYING ABILITY.
It is tough.