For recreation programs coaches need to set aside their egos and play to build a program, not necessarily to win. A lot of the time you can do both. Play everyone on the team no matter what. It will inspire the weaker players to continue to get better and it will make your better players work harder to make up for the weaknesses on the team!
That weak 5th grader may turn out to be a star by freshman year in HS! If they are discouraged early on they may never return.