I think that we can apply a similar principle to sports which is used to resolve similar problems that arise in academics.  When precocious students are studying at well beyond their grade level, they can be promoted.  If this athlete is performing at well above his age level, put him in a more advanced league.

To prevent a talented athlete from playing is very perverse.  We should encourage excellence, not stifle it.

This was discussed at the Volokh Conspiracy: http://www.volokh.com/posts/1219773332.shtml

The fastball of 40 mph is not all that unusual, and there are accusations that this is just an excuse for corruption.

I'm with the consensus here.  This kid needs to play with his equals.  Playing against kids who aren't as good as him will only hurt him when he does go up against kids who can keep up with him.

If he's just got a rocket arm and everything else is age-appropriate, then he should play another position and build his all-around skills.  Doesn't first base call for a good arm?

When we're talking kids this age, in a league that's specifically described as a "developmental league", I think it's perfectly reasonable to not allow too-talented kids to compete.  It'd be like having a Alex Rodriguez playing in an after-work softball league - sure he should technically be allowed to play, but what on earth would the point be?  

If we want kids to enjoy sports and want to be active, I think it's important to maintain some competitive balance at the lower levels.  It's far too easy for coaches to get some kind of ego trip out of winning and humiliating other teams.  I played Little League & midget football when I was in elementary school.  My Little League team was middle of the pack and the league wasn't terribly competitive, and I enjoyed that quite a bit (although I ultimately quit because I just wasn't all that good at baseball).  After leaving Little League I tried out football (which suited my build & athletic skills a lot better).  Unfortunately, the football league wasn't nearly as well balanced and all the coaches were much more hyper-competitive.  My team ended up losing all our games (by fairly wide margins), and our coach browbeat us for our poor performance.  Needless to say, I didn't play more than one year and I stayed away from sports after that until late high school.  

Kids that age don't yet have the maturity to understand that winning isn't everything and that you can (and should) play for the enjoyment of the game as well.  If you want to keep them active and interested (and to learn to enjoy the game itself, and not just winning), then maintaining some sort of competitive balance is key.  That's not to say that achievement shouldn't be awarded, but there's no point in having a team in the league that's so good that nobody else can come remotely close to competing with them.  

What does keeping Jericho in the league teach him?  That's it's okay to dominate people that are obviously weaker than him.  What else?  I'm not sure.  There have to be other leagues in the area that are at a higher skill level which would be glad to have a kid of Jericho's skill.  I don't understand why his parents & coach weren't willing to let him finish out the season at second base (where he could learn other skills) and then place him into a different, more challenging league the next year.  It seems to me like egos, and the need to find success vicariously through this kid, got in the way of good sense.

What a terrible shame that these sheltered little snowflakes might get exposed to the downside of competing -- losing.

It seems the parents of one precious snowflake are doing their best to keep him from experiencing that downside by pitting him against kids who can't compete with him.