There's a whole problem around "people want to beat other actual humans", but in 1:1 competitive games, the average winrate is tautologically always 50%. In Battle Royale, the average winrate is more like 5% - But it's unevenly distributed, so some players are getting 20-30% winrates while others are getting 1%. The game is fun enough to play that people are willing to take 1% winrates, but at some level you want to win - That's where the real fun is. If you never win, the game is not fun. If you win occasionally, against skilled opponents, it feels like a great victory. If you win often, it's relaxing.
(There exist some exceptions to "average winrate" - Asymetric games can have a per-player average winrate above 1, though can just as easily drop below - Dead By Daylight, for example, lists 1.5B "escapes" to 1.8B "sacrifices"[1] - Did the survivor "win" when they escaped? or did the killer "win" when they killed a player? It might make more sense to view it as a set of 1:1s, since each survivor might escape individually, at which case we're back to square 1)
Ultimately, games live or die on being fun.
[1]https://techraptor.net/gaming/news/dead-by-daylight-5th-anni...
Gamers often abuse the matchmaking systems to get this result themselves. They make "smurf" accounts in the competitive games they like, underrated for their skill level either from being new accounts or by intentional losing, because it let's them bully less skilled players and avoid being bullied themselves.
Overall I think the best solution is probably the old fashioned dedicated server, where people can find a group with a roughly similar playstyle and skill level, but still enough variety to not be overly same-ey per game. I have fond memories of going up against and cursing better server regulars, and then having it flipped around when on their team.
I remember there was an interesting twist on this when, IIRC, Fortnite changed its matching algorithm to more likely place better players together with each other.
A bunch of those players were frustrate-to-outraged over the change. The reason that at least some gave? They were losing too much, and sometimes they don't want all the high adrenaline & stress of competitive matches and just want to relax and have it easy. (Yes, I know there have been more issues and complaints about the details of SBMM in Fortnite, this is just one of them)
It struck me as a uniquely selfish view, as though the entire ecosystem should be structured to their own enjoyment rather than that of typical players. Like if Gary Kasporov wanted to play in the local High School chess leagues and threw a fit when he was told he couldn't.