I would say that it depends on the kid...
Some kids thrive on challenge and get better when they are in an environment where they are near the bottom and need to work their way up..
Some kids are not like this and do better when they are very confident and can be one of the better or best kids on the team.
Also I would take into consideration the coach's style and the skills that you get...
I agree with the comment above, it depends on the kid. Something you should think about: Your kid is 10-11 yrs, ice time should be pretty close to even. Coach should maybe have the last 3 mins of a game to shorten bench during regular season games, all of tourneys and of course, playoffs. If he's not getting time, he may be further behind then you think. Ask the coach what he thinks, and be prepared for the answer.
It never changes...even in h.s. Kids get a lot of minutes and time on the PK and parents get all worked up that the kid isn't on the PP.
So Dr. Phil is the answer to stay in town hockey and not worry about going "to the show?" Heck in our town the town hockey kids don't make it to 'the show' and in fact they don't even make the varsity high school team.
If I could just get all of the parents to agree that we are all keeping our kids in town hockey then it would all be fine. And oh yeah, someone tell the high school coach his teams are going to get steam rolled for the next 5-10 years.
Welcome to the new age of kid's sports.