Did you expect Reading, Southampton, West Ham, to keep their top of the range 5 star Championship players when they went up to the EPL and challenge for the title? No.
So, we agree that lower level players have to be worse than higher level players, good. I think we can also agree that 5 is the best number of stars to represent the best players available to you at your level, though there's also the option of scouts to get higher level players, usually 6, but sometimes 7 stars.
So, the logical solution is to have players drop a star visually when you go to the next level. This way, they are worse than most players at the next level, while also keeping their quality. You might argue that we could just add stars to higher level players, but this would soon become very hard to show, the most stars T11 can show right now is 10.
They only drop a star if you get promoted, though, top 7. If you stay at the same level next season, your players will not lose any stars.