I am treating the All-State process exactly the same way I do every year. Our region still plans to hold a clinic/concert in person, though I see those plans changing after the new year. ATSSB is still having an All-State clinic that has moved to June. The percentage of kids that I have participating this year has actually increased over last year.
I see the All-State process as a highly beneficial process for the kids. With at least three years of prior solid foundational teaching, most freshman should be able to at least get through the music. The music contains decent technical passages and musical ideas. Of course there are some exceptions to that in various places. If I had to put a number to it, I'd say that close to 90% of my kids who audition for region (and are prepared for it) end up earning 1st divisions at solo and ensemble when that comes around. I'm not backing down. Sure, this year looks different. But I only get one shot with this particular group. I owe it to them to push them toward growth and region is one of the tools I use for that purpose.
I don't let my kids decide whether a certain event "pays off" for the work required. My expectations for each student may be different from one student to the next, but they are still required to prepare the music to the best of their ability.