This is the result of the entitlement society, pure and simple. As a caveat, I may be reading too much into it, having limited knowledge of the situation.
There are two wrong lessons being taught from this, to both your niece, and the kids who replaced her. The kids who replaced her are taught that it doesn’t matter if they are not as good, or don’t work as hard, that all they need to do is want to play, and they entitled to get a spot that they don’t necessarily deserve. Your niece is being taught that all her hard work and commitment doesn’t count for anything, and that those who don’t is equally eligible for a spot on the team. Big failure on the coach’s side.
My context is from this...I helped coach the local high school’s summer baseball team, and we had the same situation, parents of a kid that didn’t work out at all, couldn’t hit, couldn’t catch and spent his weeks playing xbox and apparently not watching his diet, demanded equal playing time with those kids who worked out many hours 5 days a week. I refused, and the kid left the team. I was clear, that if I saw his effort and attitude improve, and saw the kid at the workouts, he would get his chance to play. The parents decided that it was unfair to expect the kid to work at his game, and that if he didn’t get playing time regardless, they would leave. And they did.
It is not a good lesson for the kids to tell them they are entitled to play just for showing up. Will they be entitled to a paycheck for just showing up at work? This is why we end up with kids who can’t read or write properly, and 50 million on food stamps. The government schools are showing them that they are entitled to graduate, spots on a team etc, and when they get in the real world and are expected to perform to earn, they can’t or won’t.
All we know from this post is lesser players are being given more time. We don't know that they're not working hard or harder than the niece. Several times I've benched my best players for not showing up at practice. Or showing up and hot dogging it. And naturally their parent (inevitably a single mother) shows up screaming at me for benching her kid. I found if I explained things calmly to her, she understood. And came to back me.