The point being missed is simply this:
The divisions should be capped at 16 MAX and typically, you will get close games. Sure teams 12-16 might get beat up a bit, but should be able to pull out an upset here and there. The 16 teams is also perfect for the 20 game schedule (15 reg and 5 preseason).
If AA should be capped at 12, then trickle down will mean proper placement for all teams in all divisions at 16 teams. (Why AA at 12, well... that's a huge trickle down from the 4 AAA teams.)
In SCAHA alone there are 65 PW teams. This would breakdown into 4 AAA, 12 AA, 16 A, 16 BB, 17 B. It's too perfect. As for the Squirts, the same can be done, but it is not tiered, they need a 16 A, 16 BB, 18 B, as they have 50 teams. Instead, it is a clusterfk of randomness and magic flights of 9, 12, 13, and 16 team divisions... WTF?
Balancing out the divisions will create consistent and adequate competition.