So, to be clear, competition – with rewards, prizes, and medals – is a form of extrinsic motivation. Extrinsic motivation is often very powerful (gun at your head – also an extrinsic motivator – will motivate you to do what's asked). The problem, though, is that it's short-lived.
So if you were a sports minister who tries to maximize people's involvement in sports (at all ages), you would prefer to have more intrinsic motivation to sports, rather then extrinsic.
In chess, for instance, a 200 point rating difference usually gives the stronger player an expectation of about 3:1. And ratings range from about 500 to just under 2900. So those ratings are absolutely critical in order to find an opponent at your skill level. In sport the exact same thing is true, with similarly wide scales of ability. I think the humility that rankings force upon one is also a very important part of sport and improvement.
So for instance about the Norway anecdote you gave (related to the prohibition on youth rankings from the 70s onward), Norway was always absolutely god tier at the winter Olympics, long before the 70s. In the 6 Olympic games from 1924-1952 they came in overall #1 5 times, and #2 once. In the 12 games since 1980, they've only came in overall #1 3 times. [1] Their total number of medals has increased, like everybody's, because many more events, and occasionally even new sports, have been added to the Olympics over time. I would not read much into this one way or the other, beyond pointing out that it's not a particularly relevant anecdote.
The Nordic sports model is specifically against rankings for kids. It's fine to give them detailed scores or ratings or evaluations that help them improve. It's not fine to order their results and put them on a list of winners and losers.
Generally, sports feedback (and also goals) should be centered on things that you can control (like technique). Ranking – the place you earned in a competition or a tournament – is outside of your control, as it depends on the performance of others (and also on the quality of the judging and judging systems). Rankings are based on comparison and have a number of issues – take Uber ranking inflation, for example.
If your kid scored 3rd place in a competition – what does it tell you exactly about her/his technique or quality of coaching? Pretty much nothing. Only the fact that 2 other kids scored higher. Unfortunately, it's not rare in sports to see how the general national level of coaching in some sports goes down, while everyone still have their ranking and medals.
Using (measurable) ratings and scores as feedback also needs to be taken with a dose of caution. These systems are developed by humans, they're imperfect and usually measure only what is measurable. Sometimes, they're even wrong. Back to the IJS example – the system that was designed for Olympic-level athletes – it is often used for kids' competitions. For the lack of other options, judges enter entry-level elements into the system and assign base values. Instead of "quad lutz" it's a "shooting duck" entry-level exercise and assigns points to it. Then, judges pretend that they can "measure" this child's exercise – was it 0.4 points or 0.5? Needless to say, there is no actual measurement of "shooting duck" – it's just when all you have is a hammer, everything seems like a nail. Then, the parents fight over whose kid is judged more harshly. So, these systems can be pretty flawed.
And yes, of course, I don't attribute the Norway Olympics' success to the lack of competitions till the age of 11. Rather I'm showing that the policy of late specialization and withholding competition till kids mature a bit is not against the goals of high-performance sports.
And in general I am very much a fan of avoiding excessive extrinsic motivation. For instance I loathe, with a passion, participation trophies. Because I do agree that this results in people participating only for those trophies rather than for the sake of the sport. But where we may differ, perhaps, is that I do very much think that excellence should be rewarded and recognized. Not even just for the sake of those victors, but as a model for other people to strive for. And, in any case, if somebody is good enough at basically anything to be #1 in it, they're already going to be driven intrinsically, or have crazy parents... but that's another topic!