I must respectfully disagree with you on the three class situation. You may see it as watered down, but I would suggest it's because you are focused only on the top runners in each class (your ACT and SAT example suggests the same). Three classes has helped increase numbers in those middle schools and created runners and teams that weren't there before. Can a little school like your Lebanon team compete at that level? Yes, once in a generation. Your talent only comes along rarely. Generally, the bigger the school, the better the team.
And, when both my teams qualify this weekend for the state meet, they will see it as a great honor to do so, even if it's a three class system and we are in 2A.