The following season, as a 12 year-old, we got a few new players in a group of new players who moved up from the younger division. We went 15-0 and won our league championship. Four of the new players went on to become All-State high school soccer players, and one of them later played on the first U.S. World Cup soccer team in 1990.
As I looked back on that situation years later as a baseball coach, what I remember most is that I was playing on two teams in an organized league whose players had no business being on the same field together. The only thing we had in common was: (1) our parents wanted us to play youth soccer, and (2) we were in the same 11-12 age group.
I never had that problem as a kid playing baseball because I didn't play in Little League. We played baseball in the schoolyard every day, all summer long, with a group of kids whose similar skills made them "natural" teammates and opponents. We never needed a "mercy rule" because we never would have played in a group where one team could dominate another so badly.
You bring up a great point....kids will always organize into fair teams in order to play a game...it is the adults that have fantasies about being the next Bear Bryant that bring the lopsided teams to a league.
My junior high team had 12 players and we went 0-12. In HS I think we lost 4-5 games in 4 years. It was the 0-12 season that stands out as the character builder in the long run. Everyone likes winning, but in order to win consistently, you have to hate losing more than you love winning.
I learned to hate losing that season. I also learned to never give up.