David,
There are a couple of problems with using the selector in this configuration.
1) If you plan to just disable the sinks in GRC, then you don't need the selector at all. That block is intended to be used to change the configuration during runtime. You can just connect all the sinks to the same output and disable with the D key.
2) In the case where devices are present when the flowgraph is run, when the selector output is set to, e.g. 0, the outputs 1 and 2 produce no samples. This will starve the SDR sinks of samples and have some consequences (depends on the sdr)
As far as the SDRs being instantiated, this is just how GRC works - it instantiates all the blocks that are present in the flowgraph. So if an SDR isn't present, then the block needs to be disabled - selector doesn't help you.
Josh