@MikeMason: My guess is that local courts and district courts have to have some kind of jurisdictional line drawn in the sand in order to prevent a case pile-up. A lot of people want to pursue claims for simply the principle of the thing, not the actual monetary value or damages. This sort of thing only requires the services of a local court, not the more complicated scope of a district court.
Most claims do fall along financial lines, not the scope of the offense or the possibility of appeals. A local judge can easily rule on a $500 dog bite case or a $450 bicycle theft. District judges tend to handle cases where the stakes and damages are much higher.