Latvia will likely not be relegated at all. They are quite clearly the 10th or 11th strongest hockey nation in the world, defenitely stronger than France, Norway, Austria, Belarus, Kazakhstan etc.
If it's reduced to 14 teams, you can bank on all of Canada, Russia, Sweden, USA, Finland, Czech Republic, Slovakia, Switzerland, Germany, Latvia and Denmark to take 11 of the spots almost every time. Let France, Norway, Austria, Belarus, Kazakhstan, Slovenia etc compete for the last three spots. GBR will likely be in the mix as well in a few years.
The WC is every year, so we'll still see all of them in the top division from time to time. The only thing happening by reducing it to 14 teams is that a team like Italy has no chance of earning promotion until they do something to improve their hockey. Italy has been playing countless times at this level during my lifetime, and I can't recall them winning a single game.
It's not elitest thinking. We'll still see the likes of France up here, and while they still get blown out often, they have the capacity to pull off upsets. Italy can't win against anybody. They likely wouldn't beat the likes of Latvia or Denmark once even if they played them twenty times. When that's the case you simply don't belong.