You have hit all of the proverbial nails on the head. I couldn't agree more with everything you said. Especially your point that athletes have control of the future of local grass roots racing.
The phenomena we are seeing is athletes choosing to train on the weekend rather than using a local race to both train and gain valuable race experience. There are more athletes who are reluctant to give up the big block of weekend training (Sat. long bike/Sun. long run OR Brick weekend) rather than incorporate a local race in their training to gain race experience. I have discussed this with most of the local coaches and they agree that they get pushback from athletes when they suggest the athlete race, rather than do that long run or bike. An extension of this is something you touched on. Not only do we see more athletes training rather than race but there seem to be more who never race locally, or at best very infrequently, and go straight to the big brand races. As you said "if your first race is a 70.3 or 140.6 you're missing out on a lot of great racing and training opportunities".
This year, In an attempt to attract some of those athletes, we gave athletes an option to compete in "supported training days" this year. We removed some of the benefits (no timing, no t-shirt, no post race food) and reduced the entry fees accordingly. The athletes then raced/trained in a wave with all of the other athletes in their age group and all of the typical support of a race i.e. aid stations, marked course etc. I had hoped that a fee reduction and the opportunity to "train" while racing might be attractive. So far it looks like I am completely wrong. That might be in part to us not doing a good enough job promoting that option. We shall see if that changes in 2016.
The other concern in Ontario (the largest triathlon market in Canada) is a reduction in participation at the entry level to the support. The races we call Give-It-A-Tri and others refer to as Try A Tri. While our overall participation in 2015 is the same as 2014 and 2013, the number of participants at that distance has decreased. In the long run that is concerning as it suggests there are less new people entering the sport. We are also seeing that 75% of athletes only race once a year. That raises the question, If someone races once a year, are they invested in the sport as a triathlete? Not sure if you are interested but I recently discussed this with Bob Babbitt
http://www.babbittville.com/...lle-radio/john-salt/ We have helped to promote other local independent races, worked with coaches and Tri clubs to promote growth but the battle is getting harder. I would love to discuss this with you and see where the parallels are and what is working for you. I will send you a PM.
John Salt, Founder - MultiSport Canada
Canada's Largest Triathlon Series and Barrelman Niagara Falls
http://www.multisportcanada.com /
http://www.niagarafallstriathlon.com "Discipline Is What You Do When No One Is Watching You"