Alright, fine, screw it. Let's do this, even though I'm sure it'll be a waste of my time to write all this down, even assuming anyone bothers to read it.
People around here seem to suffer from the delusion that the stronger you get, the higher you will rise in the arena. It's an understandable delusion, because that's the way ranking and matchmaking is supposed to work. That's how it does work in just about every game ever made which feature a competitive element with some sort of performance evaluation (there are several games, especially in the early days of multiplayer gaming, where you just joined a random server and got stomped or did the stomping because there was no matchmaking and no ranking). Nevertheless, it is a delusion, because that's not how it works. I know this, because I experienced it myself in real time.
I made it halfway to S3. Now I'm not even clinging to S1. Did I get worse in the last week? Not really. If anything I've improved my team. Did literally everyone suddenly become considerably stronger? Well, maybe, that's hard to say, but I seriously doubt it. Yet, the stronger I've supposedly become, the more difficulties do I encounter in the arena.
So why is that, exactly? Short version; the arena matchmaking system is trash. Absolute garbage. Certainly the worst I've ever seen, and quite possibly among the worst ever conceived. It is so bad that I'm almost sure it's intentional, because I really don't see how someone could accidentally make something that is this atrocious.
Long version, it's because they have a system that evaluates the performance of a player and then doesn't primarily use that performance as a basis for further matchmaking. Like I said, I made it halfway to S3, and I won quite a few matches in S2 while I was up there. It wasn't because I had great champions or because I'm a tactical genius. It's because, albeit unintentionally, I gamed the system. I suspected there was something going on when the arena suddenly and for no apparent reason started getting more difficult. A lot more difficult.
I started collecting some data points in order to figure it out. I found very little correlation between player level and team power, but I did find some between total power. It's somewhat expensive to manipulate though, so I only had minor variations. Then, as I've outlined in another thread here, I opened a bunch of ancient shards during the 2x event, and my total power spiked up by quite a bit (42%) to be specific. Incidentally, my opponents suddenly did the same in the span of 10 minutes. I've since collected some more data. I have about 40 data points now. To summarize, power levels are generally within the +/-25% range, generally with some bias on the higher end and the average being slightly higher than my own, but that may just be noise. I plotted the trend line for relative average account power as well using these data points, and it gave me a flat, straight line (well, not entirely, k=1.06 to be specific). My conclusion? Arena matchmaking is based on total power (within an arena point span). It may be based on other things as well, but it's an enormous coincidence if power is not a factor.
So with the assertion that total account power determines who you face in the arena, let me reiterate my earlier point: the matchmaking is complete and utter garbage. I suspect that's sort of vague though, so let's expand on that a bit.
Let's start with the minor detail that it negates its entire purpose for existing in the first place. You literally have a system that ruins its own supposed function. Having a ranking system is based around the idea that you advance as you get stronger and face stronger opponents as you go, by virtue of them having advanced as well. The current matchmaking does not guarantee that. Instead, you'll be matched against similar opponents regardless of your progression in the rankings. You have teams of all levels of actual performances grouped yet isolated from each other in the same tier. It's almost like weight classes in boxing, except in this case it'd be more like grouping boxers by hair length. It makes no sense in the context of what the arena actually is.
Second, I lied a bit. Getting stronger doesn't necessarily mean you face stronger opponents, depending on how you define stronger. You can game the system, as I did. Put every ounce of account power you have into your arena team, neglect everything else, and you'll be at an advantage. Do the opposite, you're at a disadvantage. So, even if you were to run with the inane notion that basing matchmaking on account power in some way makes it fair, you're wrong, because it's not. It just punishes you for playing the game "the wrong way", based on some arbitrary and undisclosed definition of what the right way is. Oh, and the power calculation itself? That's garbage too, so even if you were to ignore all the previously mentioned problems, it's still nonsense.
Third, continuing the line of thought from above, it arbitrary defines a right and a wrong way to play the game, at least as far as the arena is concerned, despite having no reason to do so. Are you the completionist that likes to collect as many champions as possible just to say you have them? Well, sucks to be you, hope you didn't plan on using the arena. You want to build a strong a versatile roster to max out the crypts? No arena for you. You have an arena system that for no reason whatsoever punishes you for trying to participate in other areas of the game, and vice versa.
Fourth, as is the topic at hand here really, it locks progression on yet another unrelated part of the game, specifically the missions. Judging by the display of head stuck in sand previously, that's not likely to change, despite the argument for it being so succinctly summarized in a previous post as "complete BS".
Now, I've only been to S2 as I mentioned, so the sitation may be different in higher tiers. If I were to theorycraft a bit, I would imagine that the amount of bloat relative to useful power will flatten out as you get further and further towards late-game. Most people at that stage will likely have multiple champions highly leveled with gear and upgrades to match, so having a bunch of level 1 nobodies and food in storage doesn't contribute to your total power in any meaningful way (for me, it's well above half my total). There's also a difference in ecosystems, as the top will naturally have less people in it, so you'll find more extremes, and that if you're capable of putting together a, say, 200k power team, then perhaps you'll simply run out of equal opponents in lower tiers and brute force your way through. In other words, the system will still be garbage, put it'll be enough garbage for it to form a sort of semi-solid platform for it to stand on. At lower tiers though, it's all broken glass and questionable syringes.
Oh, and spare me the trite old remarks about how I just need to git gud and that I'm just complaining because I didn't git gud yet. That's not the point. If the problem was I sucked, which I very well may, and therefore was in the lower tiers until I could get a better team, that'd be fine. That'd just be a normal, functioning matchmaking at work. The problem is that there is no lower tier. But I did get to S2 once, so that really just leaves two options here. Either the system is garbage because I can't get up to S2 now, or it is garbage because it let me get to S2 before despite being weaker at the time. Oh, and the arena progression missions would still, likely, be way out of proportion.
So to summarize the whole thing, I'm sure I missed some reason for why it's garbage, but it is. It counteracts itself. It counteracts other parts of the game. It does so for no apparent reason and does more harm than good. Almost anything would be better. Literally nothing would be better. At least if it was random, you couldn't screw yourself over by breaking some untold, nonsensical rule.