One of the main stumbling blocks (as I see it) is the accepted notion that if you don't make the final cut for say the div 1 team you've been in all year that it's only fair that you been allowed to play div 2 even though you haven't played there all year. (Assuming both teams in finals etc).
The problem develops when clubs with 3 or 4 teams that all qualify for finals get a snowball effect where 5 players drop down from first grade, 7 from reserves, 10 from thirds and then its unrecognisable in the 4ths.
Lots of players only play 10 games a season. How do you put provisions in to keep them in the grade they should be? You could implement a rule that once you play 5 games up a grade then you can't go down. But that would hurt players forced to play up to help out when injuries hit a club.
Tough one. Not impossible but difficult.