With the number of stars floating around, I feel vastly under qualified to comment, but...
My biggest problem with people jumping in with a high level PC is the risk to the other players. My first game at DragonCon two years ago, I accidentally signed up for a 7-11 slot. After going upstairs, Mike Brock told me I was welcome to play but recommended that I play first steps instead. Knowing what I know now is was very possible I could have gotten that whole party killed, not because I am an inexperienced player (I have been playing RPGs since 1980)but because I had no idea of the powers or potentials for that particular character. I am not sure that getting rid of the 7th level completely is the answer (since some time you need them to make a table,) but they should be strongly discouraged as a replacement for time spent.
More on topic, any "living world" is going to become somewhat more elitist as time goes on. That is because now you have a group of people that have become "experts" on the subject having spent 100s of hours "working" in that environment. Just look to World of Warcraft, or hell even academia, and in some aspects they deserve the arrogance that come with that time spent, they have earned it. That being said, I don't think anyone is implying that is the end all goal, Ultimately, I don't think to can combat this on a global, or in this case PFS organizers level. In the end you can only prevent by how you act in your local area, whether in be with your VC, at your local store, or at your table.
My two coppers.
On a side note, Kyle has killed one of my characters and it was glorious. :)