At all of the bigger associations, the teams for next year are picked (for the most part) in January/February. Usually only a couple spots are open on any of the higher level (tier) teams, if that. And coaches usually know the 5-6 kids that they want to look at for the final couple spots. Everyone else is ignored for the most part.
No matter how much your kid improved over the tail end of the season.
No matter how much your kid rocks the tryout.
Didn't get along with the coach from last season (or the parents of a one of the good players whose parents snuggle up to the coaches)? That's going to affect your making a tier team next season too (even if it's a completely different coach's team)
It's rink politics and a bunch of bullshit, but it is what it is.
It sucks, but in the end it's still your kid's game. You're kid will make friends and have fun, eventually. The parents might be more fun on the lower level team too! As well, one season of lower level hockey could also aid his development. Being "the man" on a lower level team and getting experience playing in all situations vs not as much playing time at a higher level has it's benefit too.
...but not everyone would agree with me