What’s the point

I don't understand the point of sponsoring 50, 65, or 85 riders honestly. Only KTM and Cobra make 50s, so you aren't selling bikes because Little Johnny wins, they only have two to pick from anyway. And 65 or 85s makes no sense when they switch on big bikes (Ryder D, Deegan, and others). The amateur system is beyond confusing. 

OP I think you might be conflating the Ryder D and Jett Reynolds situations. I don't think it was Kawasaki's plan for Ryder D to leave, but they left that possibility open by not committing to him earlier.

Jett Reynolds under-performed and they moved on from him.

Its so they get first dibs on the rider when they turn pro. It's impossible to tell who's gonna be the next phenom, all they can do is make their best guess when the riders are young and hope it works out.

If the rider doesn't perform as expected once they turn pro, then it's not a bad business decision to let them go. This is how any investment works.

Ryder D said on Pulpmx that he never got an offer from Kawi and was seemingly bitter about the situation.

That's what I meant by "not committing to him earlier". Reading between the lines a bit seems like PC was dragging their feet and Ryder D said screw this and jumped at the TLD offer. I don't think that's how Kawasaki wanted things to go, though. I could be wrong, I've not listened to the Pulp interview.

To the extent that you are talking about poor performance, you are tripping up on the sunk cost fallacy.  It makes sense to invest in potential before it is realized.  It rarely makes sense to continue to invest in potential when that expectation proves to have been misplaced.  That is the meat grinder of any sport that has few spots for success.

Very rarely do you see someone bog down when they hit the pros and then later turn it around to be reborn hard.  Osbourne and Anderson are two exceptions that come to mind.  

Don't forget that the hype surrounding Ryder D's amateur career and his rookie season are part of what they pay for. Scooping a rider up early gives them a better angle on retaining that guy, should they choose to do so. It's an investment, and some investments don't pan out.

I think one reason is the return. Money goes into the motocross industry from amateur racers, and parents look at who’s winning and follow suit when they spend money on their kids racing.

kinda the same thought that what wins on Saturday sells on Monday, but there isn’t Pro 50-135 classes, so the next best thing is get the top amateur to represent your brand.

The investment isn’t in just one rider, it’s in many young riders.  If one out of the many comes to fruition as a successful pro then the investment was worthwhile.

I liked your post on behalf of one Steve Matthes.  

PC letting Ryder D go is one of weirdest moves I've ever seen in MX/SX, there has to be more to it.

In my opinion Ryder D showed more than Deegan during amateur's, obviously amateurs is not a perfect indicator how a rider would go in the pro ranks, however Ryder was very very good during, maybe there is more to the story, I agree with Matthes this move Kawi will regret.