You really say it's "balance" that you just have to bring any 4 legendaries into the arena and they HAVE to win because they are legendary?
High Khatun is epic, not rare, btw. And of course a High Khatun will loose if she fights against any well equipped legendary 1 vs. 1. The game is about team composition. High Khatun is not only fast by herself, she also makes your team faster, she has a move that fills the turnmeter of your other teammembers. Some other champs have the same move, Apothecary, Gorgorab, Deacon Armstrong, Doomscreech and so on, just choose one of them.
Other players beat your team with rares because you obvieously have no idea how to create an arena team. You can buy shards, but you can't buy playerskill.
Just one example of a good, rare-only arena team: Spirithost (leader, speed-aura), Apothecary, Kael, Warmaiden. To work well they have to act in the following order: 1.Apothecary: Speedboost, 2. Spirithost: atk buff, 3. Warmaiden: def debuff, 4. Kael: AoE attack.
To work like that they need the following gear: 1. Apothecary: Speed, 2. Spirithost: Speed, 3. Warmaiden: Accuracy, 4. Kael: Damage.
You hace access to legendaries and to good gear. You should be able to create a team that uses the same idea like the above mentioned team, but has better champs. You have Abbess. She could do the job Warmaiden has - gear her with accuracy for that. Or she could do the job Kael has - gear her with damage for that, and make sure somebody else lands a def debuff on the opponent team before Abbess attacks.