Long Rant (Sorry in advance)
If it is pay to play, then all kids should be playing the same amount. How can you expect any kid to get better if you don't give them the chance to succeed (and sometimes fail as well). High School Varsity should be the first time where this would not be the case. Kids can't get better sitting on the bench.
My dad coached my teams growing up. When we got to Bantams, we had 2 kids that had never played hockey before sign up. My Dad played them in all situations. Did we like losing games because of it, no. Was it fair, absolutely. My Dad constantly got parents asking why he had those players play late in games and on the penalty kill. He would always retort with, "Their parents paid the same amount that you did. These kids make all the practices and are trying just as hard as your kids are. We will win as a full team and lose as a full team."
You also might not know what you have. One of these kids was a bigger kid for Bantams. He was not a good skater, but had really good balance. He figured out by the end of the year how to position his body in front on the PP. He ended up scoring plenty of goals due to it. He wouldn't have had that chance if he didn't get ice time.
Creepy Jeff has nailed this. He is exactly right. In minor hockey, everyone pays the same amount for their kid to play of the team. It doesn't matter if it's house league or AAA. Everyone has put the same money it. Therefore everyone should play equally too yes? Yes.
Even if they are not as skilled as other players or are positionally challenged when it comes to forward or defence or PP or PK. That is then your coaches responsibility to get them up to par. That starts at practice.
Minor hockey is all about development. What is the end goal? To get your kid to the NHL or the highest level that they can play to. So how to players develop? By practicing, by getting minutes in game. How can you get any better in a game when you're sitting on the bench... (I am aware you can be training individually off ice to try and up your play, but being a game player is different then being a practice player)
So you're the 12th best forward on your team (lets say they only have 12 forwards on this team). And your coach believes in shortening the bench. So you will probably not be playing very much. Thus your development has suffered compared to the top players. Well now its playoffs and your top few players are injured... The coach is put in a situation where he will probably have to play the 12th forward. So team play may suffer now because the 12th forward in an unfamiliar role playing more minutes. He could very easily make many, and or costly mistakes. All because you didn't roll lines and let everyone develop.
I've haven't played minor hockey for some years, but I'm sure this stuff is still going on, if not worse than before... Part of the problem is the coaches think they need to be the Scotty Bowman of minor hockey. Be a Scotty Bowman in the way that you have made your ENTIRE team better come playoff time than at the start of the year. As a coach in minor hockey it shouldn't matter your W-L ratio. What matters is did the kids get a lot better and did they have fun. The answer should be yes.
Now I believe the time to shorten the bench is when you stop paying to play hockey. So for me, this was junior level. No one's paying anything. Therefore why should you get a fair shake at ice time. At this level and higher, you need to earn your ice time.