Doing that made it clear to you that you might be good in your city but there were still kids who were way, way better than you were likely to be.
In contrast, smart kids often don't hit a 'bigger pool' until they get to university.
In some ways many places are better at handling kids who are good at a sport than they are kids who are good at school.
An abrupt cynical thought: Could it be related to how sports are closer to being a revenue-source?
https://www.latimes.com/nation/la-na-stadium-arms-race-snap-...
There are places in Australia, such as Sydney, that have a network of selective high schools for kids who do well. But outside of Sydney it's much weaker.
There is more effort put into kids who are not doing well at school to improve their performance than in getting the most from kids who can do well. Perhaps it makes sense.
I think its more you become aware of where you stand fast. You go to meets or games of a bunch of different schools and see who is literally the best in the area. You go to state competitions and see who is best in the entire state. And then there are nationals where you see who is best in the entire nation. Throughout this your stats are posted online where you and college scouts can see them.
Academics have no comparison. We struggle to even compare grades because of grade inflation.