If he "would've" made the A team, he should be playing on the A team. Makes no sense to hold a kid back if he "would've" made th better team in my opinion. I guess getting a free pass was a good thing?
You are assuming the A team will be better when both will actually be good
Both will be mediocre.
And that is fine as long as the kids are having fun and getting better.
It is clearly fun to get better and you do that by playing with and against better players and also by WINNING! Winning rewards and reinforces good habits and hard work. Don't tell your sons to settle! Do them that favor. You will regret it if you don't.
