A friend of mine recently mentioned on Facebook that the soccer program her daughter is in does not have winners and losers. Everyone is a winner for a game.
It's not news that this kind of thing goes on, but what's annoying is that it hasn't changed. As far as I can tell, most parents understand how destructive this is. Most parents I know seem to try and set realistic expectations for their kids over simple things, like what food is available at meals, or that not cleaning up their toys has consequences. It all relates to issues of fairness and a view of the world that is realistic.
I can tell you as an experienced coach that winning and losing is so important. As a coach, I can tell you that I've made all kinds of really bad decisions for kids. I've made poor lineups, given bad advice and misplaced anger. It comes with being human. Now add in the other things that go into playing a sport, like pressure from parents and others, better opponents, injuries... all things that pretty much make it a certainty that you won't always win. So why would you want to set them up for the unrealistic expectation that this isn't real life? The kids need to lose at an early age, or they'll end up a bunch of maladjusted little shits.
All of the silly clichés about what doesn't kill you makes you stronger are true. Not getting what you want, losing and failing, give you the experience to effectively help you deal with life. Deny kids that, and you set them up for a miserable life that they can't adjust to. This "participation trophy" nonsense has to stop. You're not shielding them from self-esteem damage, you're turning them into entitled brats who won't be able to function as adults.