Question

Getting in line and counting off as "ones" and "twos" when forming teams will prevent less skilled players from becoming embarrassed
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Answer 1

True.
Being picked last is embarrassing to many, many people. 
Doing this could also prevent the "I want her because shes more stronger, or more pretty then her" kind of team captains.
Not being able to chose your team is better then only picking out the best. 

Answer 2

This is true.

Being counted off as ones and twos is a much fairer system and this way no one gets singled out as being less skilled players. It is always very embarrassing as a kid when you are being divided up into teams as captains will either tend to pick their friends or people they like or those they see as worthy of being on their team and kids get left behind and made to feel less worthy. This shouldn't happen, it should always be a fair system.