Canada has a similar structure, but it's gender differentiated to reflect that boys mature at different stages than girls. We have two age-limited categories: Pre-Juvenile (which isn't truly a competitive level, but, gives kids a taste of what it is like) - girls have to be under the age of 11 at July 1, boys under the age of 12. For Juvenile, which is our first Competitive level, girls have to be under 12 at July 1, and boys under 13.
It is very true that skaters could/would "hang back" and compete Juvie if they wanted a medal, you see that in all levels of skating; however, recognizing the different "profile" at this age, the age limits are placed. Because age can make a huge difference in terms of skating competencies, you don't want to discourage skaters entering the competitive track by having a 11 year old skating against a 14 year old who is bigger, stronger, more years on ice, more maturity. We also don't have an "Open" category. Pre-Novice is the first level out of Juvie: you simply need to land 3 clean doubles, some specific spin requirements, and pass a minimum PCS score, which is not unobtainable for skaters who want to be competitive, one would hope.
Many skaters do seem to be going straight to Pre-Novice, and skipping the Juvenile year entirely, particularly as that level no longer goes to Nationals any longer, or to National qualifiers: it simply stays at the Regional (Sectional) level.