To repeat some of and supplement what LeonL said, it's basically about insurance coverage. It used to be that if the club purchased a USA Water Ski club membership and if its members were USAWS active or grassroots members, they would be covered under the policy if they were injured while using the club's course.
About four years ago, USAWS changed this so that members skiing the course would only be covered if they were participating in "sanctioned" activities. Our club, like the club in the OP's situation was a practice only club. So, as the club presidentn, I just went on USAWS's web site and set up sanctioned practices for every day of the year from dawn to dusk. Members were required under the USAWS rules to keep a log of when they participated in "sanctioned practices."
About two years ago, USAWS changed things again. Now, for members skiing the course to be covered under the USAWS club insurance, not did members need to be participating in sanctioned practices, they were also required to be pulled by a USAWS "rated driver." So a handful of us sent in information for background checks, took a written exam that basically determined if we had a lick of common sense, and participated in "on water" training. We also are required to pull 10 hours of sanctioned practice per year, which is reported to USAWS.
At the time, my concern was that if we required this of our club members, we wouldn't have club members for too long. But, as LeonL mentioned, enforcing it was very impractical (our club courses are on leased public water). So what I did was tell the club members it was required, but that there was no way for me or anyone else to police it. Most importantly, they were told that if they were injured while skiing and they were not being pulled by a rated driver, they would not be covered under our club's insurance policy.
I am no longer the club president having reached the end of my term. But during my time, I was far more concerned about nonclubmembers being injured by our little floating liabilities than I was for clubmembers being injured. That's a whole different insurance policy.
One last thing, as a club, you cannot sanction practices unless at least one of your members is a rated driver.