I think any time the scoreboard is operated that it's a good reflection for development of a Club's team's performance in that relative level/age group.
By no means is it a final determining factor, but when you have positive "player development" at the individual level, then when it transpires to the team as well then that is a good measurement.
Agreed, player development is reflected in team performance; as individual skill increases, team performance should also increase.
When we talk about development, though, one of the things that a win/loss record does not take into account is the starting point vs. the ending point of the teams. A team that loses 8-0 in the beginning of the season and then loses 1-0 in the second encounter with the same team at the end of the season has done nothing to improve their win/loss record, but which team has developed more over the course of the season?
Another reason I find not to focus as much on wins and losses in PMSL is that it can cause coaches to change our focus during games toward the necessity of winning over the need for developing players to get their time on the field. I've at times been as guilty of this as anyone.
PMSL is not Challenge or Premier; neither is it Rec. In my experience, there is a wide diversity in players at the PMSL level, in skill level, experience, and motivation. We have talented, experienced players who have stepped down from Challenge teams for a reduction in cost, travel, and/or pressure. We have players whose primary focus is on their high school teams and they are trying to maintain their skillset throughout the off season. We also have players who are taking their first step up from recreation into a more competitive arena and are looking to make that transition to a higher skill level.
If we focus on winning games as the "proof" that we are doing something right, then there is the temptation to focus during games on our most talented players--the ones who are "getting it done" on the field. When we're under pressure to win, sometimes those newer and less-experienced players, the ones who are making that transition into the competitive arena and are in most need of building confidence through experience, spend the least time on the field and feel the most self-conscious about their mistakes.
For those players who choose and have earned the right to step up to Challenge and Premier play, the ones who have committed to entering what Anson Dorrance calls the "competitive cauldron," the win or lose, survival of the fittest mentality may be the best approach to take them to the next level. But for the developing PMSL player--the one still building skill and building confidence--the ability to make mistakes and correct them, and the ability for teams to be willing to take losses in order to allow them to make and correct those mistakes, might be the more constructive environment.
Just my two cents; there are certainly other arguments to be made.