If what you mean is the sandbagging would make it difficult, then you're right. The way the system is run (i.e., "no awards" for C class) is the right way because that's the beginner class. It's for people who want to get started in racing. The experience is their award.
If a rider is doing exceptionally well in the C class, then that rider should consider moving himself up immediately. You don't have to wait for the District to move you up, and there's no reason to stick around in C because of the "no awards" rule. As for the value of bragging rights, unless your best friend also rides C class it is minimal, as you pointed out.
Also, if you already have garnered enough experience to thump the C competition consistently, then, guess what, you are sandbagging. The District just can't act until next year.
In any case, good luck.
James