There are many areas where the proper procedures are poorly documented by the USFA. However, this is one area where the rules are pretty explicit.
Since these events are qualifiers for the national championships, we can't have divisions just make $#!+ up based on someone's opinion of what is fair or not. There's already enough flexibility in the allowed formats to give divisions reasonable choices. What NorCal is doing is clearly beyond the allowed formats.
As we saw earlier this season with the problems at the JO Qualifiers in Utah, the USFA is paying attention to improperly run qualifiers. I strongly suggest that the EC for the NorCal Division take note of that and run their Div II/III/Y14 qualifiers in accordance with the written rules to avoid problems.