My logic, based on what I saw from kids who I coached in NJ, is that the more difficult the goal is -- the more work it requires -- the more work the kids who want to reach that goal are willing to put in. Every good wrestler I worked with worked harder than they otherwise would have because it was so hard to succeed.
Of course, with more kids motivated to work harder, the more demand there is for wrestling clubs. Demand will bring supply, so there would be more clubs. More clubs makes it easier for any kid to go to a club, which means more kids putting in more work and more kids getting better. It's not something that would change things overnight -- and it would have to work in tandem with a lot of other things -- but I do believe it would put an upward pressure on the level of wrestling in the state.
Yes, it may, but at what cost? If it ultimately costs you participants in the sport at multiple High Schools across the State, then it's a HORRIBLE idea, and in a rural State like Iowa, I have a feeling that is what would happen. New Jersey and California are densely populated, which is why I will never live in either place, but the list of eligible participants isn't as greatly effected when one kid doesn't want to participate, but is quickly replaced by another dozen who do. That won't work in Outpost, Iowa, where you're fortunate if you have 14 wrestlers, and they are spread out to occupy all the weights.
The discussion of Iowa having 1 "true" Champion and the debates in specific years where Iowa has 2 or 3 reps at one weight headed to wrestle in college in all 3 classes to wrestle it out has been going on far longer than the Gable-Zalesky-Brands run at the Hawkeye Helm.
From a fan perspective of course the current format of 3 Champs facing each other after the traditional meet is the Grand Poobah. It's also a pipe dream.
Iowa's talent pool or number of State Champions in High School isn't the sole reason the Hawkeyes aren't winning NCAA Championships (not even close IMO), and any changes made to Iowa's High School format isn't going to change that. It's the same format that GREATLY helped produce 23 NCAA Team Championships. The cream will always rise to the top, the State of Iowa isn't currently producing quite enough cream compared to some previous cycles, its that simple for me (but still creating some fine DI wrestlers relative to the population).
Aside from the fact that Derek St. John didn't win State his last year, but won an NCAA Title (did the guy that beat him do that? No). Cory Clark lost his only High School match his Senior year prior to the State Tournament and won it 4 times. Does anybody on the planet think Larry Owing is better than Dan Gable?
Point being, one match on one day doesn't "truly" determine the best wrestler, it proves who was better that day at that particular time (and if you "prove it" multiple times, then I'm a believer).
Wrestling clubs don't dot the landscape in every sector of Iowa (or maybe they do and I'm not aware), but there are several througout the State in the more highly populated areas, and none of them appear to be creating the next Mark Ironside (but there might be a dozen or so of them that are currently 10 years old and we'll find out down the road).
To Summarize - Iowa High School changing the game plan isn't going to change the fortunes of the Iowa Hawkeyes, IMO. The collective efforts of the Iowa Athletic Administration in conjunction with it's Coaching Staff and Wrestlers are the only ones who can do that.