You're using too broad a definition of "crap".

The top ten percent is not actual feces. It's just varying degrees of mediocre.

Is this really the case?

A top 1% ranked Dota player is about Divine 5, the only higher bracket being Immortal and its associated ranking individual. I think you're really stretching the idiom if you're implying Divine 5 players (most of whom have 3000+ hours) "barely understand this game." Obviously a team of immortals shouldn't ever lose to a team of divines, but I don't think it would have the appearance of a competition of total newbies vs seasoned pros.

There is actually a different rule at play: People ranked below you barely understand the game; people ranked above you are nerds and no-lifers.

Yeah this is the real advantage of AI. Optimize that 90% -> 99.9999%!

This is brought up every time percentiles are brought up on Hacker News.

Based on this logic, do you think the law should be that 99.9% of everything is crap?

It's just the good ol' power law at play.

90% are crap. 9% are so-so. 0.9% are ok. 0.09% are good, 0.009% are very good, ...

0.0009% are actual super-geniuses.