I know people were fond of the idea of just Kiawe being in the league with Ash since he had done some amount of training and build up to it. The idea that the companion that doesn't get an individual agenda like contests and what not could instead challenge Ash in the league isn't a bad idea.
The bigger problems with everyone being in the league are two things:
1. Alola is clearly more passive rules than previous ones, where you had to complete the gym quest to qualify. Not sure how Gen 8 will do this, but it looks like it might be more traditional format game wise.
2. No other companion besides maybe Kiawe has really trained to the same level as Ash in Alola. Like REMOTELY. The idea of one of them defeating him with such a difference in experience level would feel like as much an insult to his development as cases like the Pikachu vs Snivy incident.
The thing is that the league is what Ash usually builds up to every series, his goal (less so in Alola but likely back to being such next series). Him getting usurped in that by someone who didn't even try would be like him randomly going into a Grand Festival and eliminating May or Dawn after we followed their progress the whole series. Perhaps to punctuate it, it'd be like Temple of the Sea but the role's reversed.
Two wrongs don't make a right, especially in terms of story and character development.