Stumbled on this thread. Good read. Want to chime in (involved in hockey for decades, lived in both AB & BC).
HSL draws some talented kids because parents love set schedules, non-game weekends to go skiing, etc. Parents also like that their kid doesn't play with younger kids (every other year), the earlier intro to hitting with same age, etc. HSL seems to put an emphasis on development over winning. Prefer sanctioned hockey myself, but appreciate that "rogue leagues" can maybe push Hockey Canada to make positive changes.
You sound happy with your choice, but there's no right or wrong "path" because because 99% of kids won't play competitively beyond high school. It's what works for a family and makes a kid happy.
Most parents wear biased glasses and many don't necessarily know how to judge hockey abilities/talent, but that's awesome if your son is indeed the "top 2 D-men" when he didn't make AA his first year. Typically, the future junior, college and NHL players have always made the top teams for their age, but there are late-bloomers. There are also many kids who are not as naturally-gifted at a sport, but work very hard to compete with more talented kids (where all that extra development you talk about certainly helps).
Still, the game DRASTICALLY changes at U15 with body-checking. A lot of kids who excel and have a ton of confidence in their game at U9/U11/U13 will struggle to adjust to U15. The kids who are smaller than average obviously have a physical disadvantage and will need exceptional speed, skill, and hockey sense to make up for the lack of size. Confidence is always vital is sports and being afraid of hitting can shatter that.
The kids who are bigger than average obviously have a physical advantage and usually aren't as afraid of the hitting, but they're often not as good at skating. They may skate too hunched over or too upright, and they don't have a good stride - shuffle or kick feet behind them, instead of pushing out from hips. Whether that's adjusting to their body after a growth spurt or just their body mechanics, I don't know. I just know that skating is THE #1 SKILL in hockey and gets more important with age. If you look at U18AAA and above, some may have better puck skills or a harder shot or more hockey sense than others, but they're all great skaters.
Your son might indeed be "very good", but remember that it's still completely relative. There are so many strong players for each birth year in one Canadian city, let alone the rest of the country and hockey-playing world. The most important thing is your son continues to love to play the game, makes lots of great memories, and learns all the valuable life lessons that come with playing a team sport.
It's not just non-athletic parents who live vicariously through their kids sports, plenty of parents who had some success in sports do the same because it's only natural to want our kids to succeed and we enjoy seeing them improve and cheering them on. It's just VERY easy to get caught up in the "arms race" (as another poster said), lose perspective about what matters, and become delusional about our kids.