I am thinking that one of these people involved in the conversation should be asking that question to someone associated with the club.
It's possible the club had no idea that many kids would show up, and had no "backup" plan for that scenario. Like others mentioned, maybe they just don't have the number of coaches necessary for that many extra teams. There are plenty of good reasons, but people involved at the club are probably the only ones who know for sure.
I had a conversation with the President at SSC the other day, and, not wanting to mis-quote him, I'll just say that he has some great ideas, and sounds like he is well on the way to making the club a strong one again. It will certainly take a good bit more time, but I don't think he would turn away that many (or any) kids if he could avoid it in any way.