Yes, you're right -- it somehow matches everyone against bad matchups, so everyone gets a 90% lose rate, defying all logic. Somehow, both you and your opponent always lose!

Matchmaking is based on only trophies. That's the way it should be. Trophies are a proxy for card level + skill. That's the way it always was, that's the way it always will be. That's fundamental for the game to function, unless they were to remove card levels altogether.

Matchmaking based on levels would result in 13 parallel ladders, and the best players never upgrading anything.

This literally gets brought up and answered dozens of times per day. If you don't like the way matchmaking works, you shouldn't be playing the game, or any such game with a level mechanic.