This is a good thread and has been helpful. We've struggled each year on how to handle it and we've called everyone (or at least have attempted to do so). I don't know whether that's the best way or not. The idea behind calling everyone is to be able to answer questions they might have regarding why they didn't make the team.
In some cases, we can do that pretty well. In others it's more difficult. At a few of our age groups we had so many kids in such a short time period that it was very difficult to give much specific information other than something like "Your hitting wasn't strong enough."
Maybe just telling everyone that we'll contact them if they made a team is better, I'm not sure. If it is done that way, then I think there should be a short time frame by which they can expect a call, maybe three days. The problem with that, though, is that if you give players a week or so to decide about an offer and you don't call a borderline girl during that time, she will have thought she didn't make it.
As some people pointed out, there are some special cases, such as a girl on the team the previous year not making a team. I think that should be handled on the phone by the coach. But if that coach is not returning, then what? Or what if you have a potential returning player and the family does not have voice mail and isn't answering the phone? I could give several other scenarios that are hard to anticipate and we've had them all, just this year.