I believe the main issue here is Boosts. Whenever teams are compared, Boosts will be taken into consideration for all matches.
Hence by just looking at the creature levels on the surface just seem unfair. Your opponents teams may be unboosted or just mildly boosted compared to yours. A L20 creature with 5 boosts applied is considered as a L25 creature. You should expect to be matched with some lower or higher level teams in the selection process (maybe around 2-3 levels higher after considering Boosts).
Then comes the RNG issue of team selection i.e. which 4 creatures are selected for the battle. If your team is balanced i.e. the same amount of Boosts are applied to all creatures, then, you’re good to go. If those 4 selected are the weaker ones, then, the battle will be an uphill battle.
To lock players at specific Arena is just not a viable solution. At one point the player will be a punching bag to others that play more i.e. more active levelling up the team, etc. As a result, the player could not progress nor can the player fall to a more appropriate Arena(s) where his/her team is competitive. Then, they’ll leave.
I was once on the leaderboard. But despite being active I have to accept the fact that many others are more active than me and most of them spent real money on the game as well - something which I’m reluctant to do (spend too much on a mobile game). So, I have stagnated at some point and unable to progress. Those at the lower Arenas than me whom spend real money on the game and active will continue to climb up. Eventually, I’ll be matched against them and should expect to get my back handed to me.
So overtime, I’ll be pushed further down to lower Arenas with what looked like once a good team.
A caveat though - while I do expect a seemingly OP teams in Aviary or Library, but I do not expect L30 team of Uniques in Badlands or Marshes for instance. Nevertheless, it’s interesting to note that when I started playing in 2018, there was hardly any Legendary in Marshes or Lockdown. But now you can expect Uniques in those Arenas.
It shows how some aspects of the game has evolved over time.