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I believe that the DP/Flex was put in place in ASA ball right around 89/90 (my daughter was playing 14U when I first encountered the rule).
The DP/Flex was adopted to allow more options than the DH rule in baseball. In particular the DP playing defense. At a meeting I attended the explanation was that this allowed the DP to give players a break on defense. They emphasized that this was to help players stay fresh during tourneys where they played multiple games in one day.
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