It was also my experience going through the system that there is a lot of politics and pressure put on the kids early on. I learned to hate it, and did not enjoy it when I made the top teams before bantam.
The upside is that after peewee and beginning in bantam, all the hardcore "play the best players because they have a shot at the nhl" type parents and players will go to AA and AAA. I decided to stay in A and play on the top community team year after year, and it was the best decision I ever made. It was still competitive enough to be fun, but it was not merciless - and that would not have been tolerated if it started to become like that either.
Not much you can do at lower levels I think though besides rage loudly or quietly. Some parents are absolute asses who think their kid will set the world on fire from the beginning...I guess I don't have much advice, I just wanted to commiserate with you and your child