OK, This thread has turned into at least three seperate issues.
1) Keeping Cats in the Olympics
2) Promoting Youth Sailing
3) Developing youth to sail in the Olympics

I think the answers to much of this was mentioned on the first page by Jake. Participation in the organizations!!

If there are not Cat sailors at the bar drinking scotch with the blue blazer crowd(insert Dan Delaves picture) it really won't matter what is done on the grass roots level.

Whether at the local yacht club or on a national level it is about participation and the social scene (insert one of Mark S's speaches on the social aspect)

Jake, John W, Dan D, Matt B and others are involved with US Sailing on a National level. That is where things will get done.
Remember the "Golden Rule"
He with the Gold, makes the rules. We need members in high places.

The idea that a 5 boat progression between the ages of 8-18 with a minimum cost of boats at $50K to get kids to sail in the Olympics is unrealistic IMO
To build on something Mike said. We can all spend a great deal of time and money on our kids to promote sailing and one day they can decide they aren't into that any more.
My daughter has sailed in 4 nationals at 12 years old, is very athletic and an honor roll student. She has skippered a number of club races and done very well.
Right now she is enrolled in children's theater because she wants to be an actress. <img src="http://www.catsailor.com/forums/images/graemlins/confused.gif" alt="" />
It was Karate before that and something else next year(hopefully golf, that pays well).