I’m a recent Midwest grad and had heard this suggested at regionals last weekend. I was shocked at he notion that teams don’t want to ski Division 1. I skied in 3 nationals for Michigan State, all D1, finishing in the bottom couple each time. But I wouldn’t change a thing! Personally, I would much rather compete with the best skiers in the world standing on the dock behind you as opposed to going at it in D2 with many of the same teams you did a weekend prior at regionals. How many times on your life will you get to say you stood on the same dock and skied in the same round as Freddie Winter, KC Wilson, etc... there's something rewarding about saying you're D1.
As for funding, i'm not sure how it works at other schools but division would have no impact on how much we get. The school sets aside a lump some for club sports, we apply, and either get a very very small stipend or don’t.
For me, natty’s was all about the experience. A reward for your teams success throughout the season. We knew we weren’t going to win, but we competed for ourselves, each other, and against the best in the world. Michigan State is going D2 for the first time in a 5+ years and it’ll be interesting to hear their perspectives this year. Maybe mine will change.