I don't make much of a big deal about it either way.
My older son has wrestled, competed in judo, played rec soccer, flag football and basketball. In judo, it's simple. You don't place you don't get jack shit, other than maybe a t-shirt commemorating the tournament. Wrestling is most often the same, though sometimes there are tournament trophies. In the past, he's been excited about those for an hour or so and then doesn't much care. Fortunately for him, while not a superstar, he can usually place if he limits mental mistakes. Most sports through my town's rec have some sort of participation recognition attached. He definitely values those things less than judo or wrestling medals he's actually earned. I wouldn't say the trophies are "hindering" his development though. Maybe he is different, because he has to put up with me. lol
I think an equally important issue surrounding rec sports is the deemphasis on competition (not keeping score, who wins doesn't matter, etc) and promoting the idea that the sport is a glorified play date (play dates are another concept which infuriate me, by the way). The kids and the parents are more concerned about the post game snack, rather than how the kids competed, whether they showed sportsmanship and teamwork. And heaven forbid you get involved and try and upset the apple cart of the social event mindset. It isn't pretty in my town. I ran a practice in the head coach's absence and actually required the kids to not fart around and be quiet during drills. The head coach got about 5 emails complaining. lol
I saw the Real Sports episode and generally agree with the study's findings. I would stop short of saying, "scientifically proven" though. Perhaps this research forms the groundwork for more research down the road.