In elementary school, teams are grade level specific for a reason. In high school, yes a freshman could play while a senior sat the bench, but in 2nd grade,for example, it is limited to just second graders.
This is how a 2nd grade parent is likely to see the situation: If 15 second graders play on the basketball team, and 4 of those should be third graders, then those 4 third graders are keeping 4 second graders from getting to play. That would not be happening if htey were playing on grade level. By playing down, they are basically gauranteed to start becuase they have an unfair advantage over other players. Elementary sports are set up to be age specific in an attempt to allow for a level playingh field as much aspossible. When they get to middle and high school, it is more survival of the fittest.