you would need more teams, more refs, more coaches, more pitch space -- We had 40ish players in our u16.. Running a A and B team they all got game time.. not sure we had the resurces to divide them into A B and C (and the C team, with the ten worst players would have been pretty difficult to manage, and develop players in)
Field space, and lining the pitches, is the only real difficulty.
When you start working with smaller groups you will find that more people get involved.
Shorter games with fewer players on small pitches means that old guys like me can still be effective refs.
Working out the logistics is just that: Working out the logistics.
The net result is more touches per player per game and that's the big plus. Having the Cs play Cs also gets players actively involved in the game that would otherwise just follow the mob.
The resistance to this? Tradition and coaches and parents egos. I've heard it all before as "It's not real rugby" or, in my case "It's not real soccer". The latter when I took over my kids soccer club, abolished 11-a-side for 6 yrs old and instituted 4-a-side with tiny goals on tiny fields with no rules.
Agree that at 16 kids could, and probably should, be playing 15s on a full pitch. However, their skill development occurs (or should) well before then and that's the value of small sided.