Wow, not cool on the coaches part. Explore your options. I think deep down you already have your answers?
This coach is someone I have known for years, a friend, and has coached both my DD's last winter.
I think we have all as parents gotten too fussy about this. Trust me, there are injuries and conflicts. The numbers dwindle.
Also there are times when a girl has a parent pass away or a girl who ends up with an unforeseen broken arm, etc. and misses tryouts and wants to come back to an org. she was in before. The coach will make an exception for this sort of thing.
I think the girls should learn they have to share spots. Bench sitting does not ONLY have to be to show a girl she "stinks," but to learn teamwork (when you're down your teammate goes in and picks you up).
Some of the girls are ready to drop after 7 games in one weekend.
I say go with it and coexist. Yes all parents should get a discount when more players are on the roster.