I think we need to be clear when we distinguish between flaws and limitations. If you were selecting an u17 provincial team and didn't take a kid who was too old, or didn't come to tryouts, or just wouldn't meet the training needs or expectations of the selection comittee then those would limit your field to: age appropropriate, at tryouts and willing to meet conditions. These aren't flaws in the selection process they are the criteria that limit the field. In the case of the NBIAA allstar game format you've just got more limitations on the field.
Limitation 1 - Your coach has to nominate you to be on the ballot. Maybe you are a dufus at practice where no one else can see, maybe your a terrible teammate, maybe you have no interest in playing in an Allstar game or at higher levels, coach wants to avoid voite splitting, etc,etc. There is an infinite number of reasons we will never know or see as to why a kid isn't nominated on a ballot in the first place. If we can trust the coach to run the team we can trust the coach to make selections too. That is a limitation. If a coach has 4 potential allstars on his roster (our view from the outside in) but for any number of reasons they all don't get nominated that limts the field. So you've already limited the field.
Limitation 2 - Coaches voting. There are no standards or guidelines for coaches voting beyond selecting 1-5 and ranking them (and not selecting their own). They can make this based on performance, potential, sportsmanship, leadership, equal distribution basically any reasons they want. As there is no uniform criteria this means that all votes are equal as a selection commitee. So your field in now limited by the bias and motivations of your selection comittee same as any company.
Limitation 3 - Spots. There are 5 spots per conference, per level, per gender. If the best 8 boys players in AAA happen to be in the SW only 5 of them are getting into the allstar game. If you are the best JV player in Hartland that is very different then having to go to JV tryouts of 45 kids at BMHS. THere are only so many spots. THe allstar game showcases talent from all levels and areas but in order to do that must limit the field in some way. This limitation reduces the number and qaulity of participants.
I don't think I can personally see any allstars at any level when this criteria is considered that I can say aren't deserving. Are their great basketball players that aren't there sure, but I'm not sure that is a product of flaws as much as the limitations imposed on the selection process.