: With my system this would ONLY happen once in a blue moon.

In theory, yes; in practice, some poor unfortunate soul is going to go up against better players all day/week/month and go "screw this game, I'm going to play something else".

: The rest of the time you would randomly play people, normal people, average
: people, and rarely, bad people.

That assumes most players have an average skill level. If you look at it in certain mathematical ways, that's true, but in other ways, including how it feels, it might not be true. If you have something backing up your statement I'd like to see it.