I think I would tend to agree with Holtee, for the most part, but I do think there are way too many divisions.
The question is extremely complex, but Holtee has hit on some great points.
The lack of a D1 college program probably would have the biggest impact on the quality and quantity of wrestling in the state. By way of trickling down, every aspect of coaching, participation and exposure would improve.
Having one division would make for a better state tournament, but I don't think the wrestling would change much. Back in the 90's we wrestled 3 or 4 tournaments a year and all were 8 team tournaments. With the growth and propagation of bigger tournaments, the quality of those tournaments has improved greatly. We at Davis had to rebuild our tournament and next year should have a showcase tournament with 8-10 top 10 team in their respective divisions from B to 4A. This ability to travel to seek out competition has had a big impact on the quality of wrestling overall.
More divisions does increase state participation and does give a more positive experience for more kids. Whether you agree with it or not, more kids are making more memories at state than before. The state champs will always be the studs, but the lower placing wrestlers are now making amazing memories with very little downside to the sport. Some may argue that the championships are watered down, but in the end the kids winning would always be the top few kids anyway. I think there is more good than bad when you consider this, but I'm old school so I still like the 3 divisions from the 90's.
When we talk about the quality of wrestling in the state, I think it is really the top 5% that set the standard. It's the group that travels nationally and internationally, wrestle all year, and are college wrestling hopefuls that are best known in the state. In this age of specialization fewer kids are playing multiple sports and in doing so are getting better at one sport. We can argue all day long about specialization, but I think the top level kids are choosing to specialize earlier than in decades past. It happens in every sport and wrestling is part of that trend. When I was in high school, I wrestled only in high school. Today, I don't think I would have been as successful unless I wrestled year round. In the end, it's the youth and club programs that probably have the biggest impact on the overall quality of wrestling in WA.