The clubs make ~$10,000-$20,000 per team depending on many factors. There is no firm "allotment of tourney funds" and clubs have some serious discretion in this department but usually choose to stick to what they promise since the tourneys are their biggest expenses. Among many possible reasons listed already, they could have been trying out some players at new positions or running a new offense and wanted to see it live. Sounds like your team had an opportunity to play some better competition than you are used to. I would say it is usually viewed as a positive when stepping up in class regardless of the actual game result. Hopefully your players enjoyed the challenge and learned from it.
