The prelims fights are low stakes. Only 100 or 200 tickets at stake, if you lose you still come out of it alright ticket wise and then you get matched up to a different opponent who may or may not be easier to beat. The point is to see who is the best player is and dividing things up by level would be horrible (on the server I do most of my playing on, I would be able to beat almost everyone in the lvl bracket above (going by the lvl brackets you proposed).