I lived in 2 states where there was a challenge for second at the state tourney. It was really tough, especially for the younger kids to wrestle a championship match and then turn around and get challenged.
I saw quite a few 3rds knock off the 2nd in the younger bracket. My son as a 10 and under, lost a close state championship match and then had to turn around in 15 minutes and face the challenge for second.
Another idea in the younger weights is to take some of the very close weight classes and their champions and have a champion of champions match. those were lively, fun and nothing to lose.