When I was in high school, the new conductor of an orchestra in which I played explained the thinking behind chair placements.
"We took a lot of things into consideration (after auditions)," he said. "For instance, there's (so-and-so) in the cello section. He's one of the youngest people in the orchestra, and it's his first year with us. We could easily have given him a higher chair placement, but if we start him off there, where's he going to go?"
I probably wasn't the only orchestra member who thought, "What? If he plays well enough to deserve a higher chair placement, he should have a higher chair placement. A good teacher doesn't tell a student, 'You earned an A on this essay, but you're the youngest person in this class, and it's the first essay you've turned in, so I'm giving you a B instead. After all, if you start off with an A, where will you go from there?"
Motivation to advance beyond an assigned chair is a musician's own business.