Although I know most will disagree I think USA cycling is doing a disservice to American junior racers by allowing them to race in adult "categories" and by not enforcing international age-appropriate gear restrictions. The gear restriction issue has been covered before so here I will focus on the race categories.
There are a lot of pressures at work and while all may be well-intentioned, allowing juniors to race with adults is not a smart thing to do. That is clearly evident when these juniors go to Europe for the first time. Racing in Belgium is quite different from racing in the US.
Race organizers are happy to delete junior categories because it makes things easier for them. Juniors also typically pay less money to race so if they can be persuaded to race category instead it is financially advantageous for the organizer. Organizers will often complain that there aren't enough juniors to justify having a race for juniors only. However, even a casual inspection of the entry lists will reveal many juniors skipping the age appropriate category in favor of adult races.
Racers often have parents who race and so it is not surprising that these parents want to race with them. Surely racing parents find it most convenient not to have to drive to another race so junior can get his or her workout. If anything, they like to get a complete package. Kids too like to be in the same race with mom or dad and nothing is more fun than beating your parent in a big event.
Teams, and especially sponsored teams also push their young riders to race category. A variety of excuses are used to justify this position. Team directors may not take junior events seriously or fear their sponsors won't do so. They will say that there isn't enough competition in the junior categories. This is of course a self-fulfilling prophecy. If one pulls all the young talent out of junior races, there won't be enough competition for sure.
Teams like to brag that their juniors beat the adults or are capable of beating the adults. That is hardly an accomplishment as the majority of US category racers are older guys who race for fun on the weekend. Most young people are faster and if they are smart enough to draft during the event, they have a very good shot at out sprinting the age groupers. The only thing holding juniors back is often the gear restrictions, which may be one reason these have survived so far.
Adults also like to show kids how it is done. Unfortunately humans learn by exposure to new environments. The more variety there is the better. And variety is something that is sorely lacking from most category races in this country. Although you can race in a big category pack, a master's pack is quite different from a junior pack.
A final reason is similar to what drives parents to put their toddlers in college prep courses. These parents are fearful that their offspring will miss out on a big opportunity lest they start their college education before age 5. Time and again research has shown no benefit from such programs and it seems more than likely that the same applies to sports. Forcing kids to compete with adults is not helpful and can only have negative effects. For one thing, most adult cycling races are too long for young people. The races effectively wear out younger riders, preventing them from developing speed and agility.
Instead of forcing kids to race adults, organizers should focus on making it easier for kids to race. By being less intimidating, age appropriate races are likely to attract more youth and parents who may not be racers. The tremendous success of NorCal mountain bike league shows that providing safe and inclusive racing conditions for youth encourages widespread participation. NorCal also shows that kids from non-racing parents are eager to compete in cycling. Apart from attracting large groups of youths, NorCal has also accomplished what few road races in the US manage to get: a large and eager crowd of spectators.
Only by widening the pool of racers and interested spectators will racing become a major sport in this country.