I think this is appalling. I think that Americans are robbing their children of an opportunity for greater happiness in adulthood.
Sports are mostly meaningless in life, and that's sort of the point. They are suppose to be fun, and are often very cathartic.
In life you will fail. You might not get the job you were hoping for, you might not get into your top choice school, or maybe your latest project at work just didn't go so well. If you played sports, and were allowed to win and lose, then you have the emotional skill set to deal with these things.
When you are part of an athletic team, you learn so much more then just how to be an athlete. You learn how to work with people, even if you don't necessarily like them. You learn to push yourself, and others to do their best. You learn to recognize when you've had a bad day, and learn how to avoid the next. You learn that sometimes your best isn't the best there is, somebody that doesn't need to try nearly as hard as you can still beat you. You learn to cope with losing, which I think is the most important thing about sports.
We have taken away the emotional part of losing from children; when they are faced with losing at something in life (which is quite common in the work force) they won't have the emotional tools to deal with it.
In Japanese sports there are winners and losers. I think that this is in part what creates such an amazingly cohesive society. Individuals learn from a young age how do deal with their emotions, and learn to manage themselves as part of a team. Watching sports day here in Japan, to me, was the epitome of Japanese culture. I am so glad I got to be part of it.