30+ years ago I was a "jock" and top 10 in academic standing in my class at a rural consolidated school. If memory serves, 6 of the other 10 were also varsity letter winners. Since then, nieces, nephews, and cousin's kids have all gone through there or are still going through there and I don't think much has changed. Participation has gone down, but most of the strong academic performers also play a HS sport. As far as I know, there aren't HS athletes getting a pass and there aren't kids being demeaned because of their intelligence. The last varsity b-ball game I attended honored the Jr. High robotics team at halftime for winning the state competition.
Again, anecdotal, but I don't believe that rural schools are sacrificing academics in order to exalt athletes or their athletic endeavors. If anything, I think the small rural schools skew the other way.