Xserver is supposed to make it balanced OVERALL. Now ideally this means every SINGLE fight should be balanced, but likely due to the small Queue pool* at any given time, that's likely impossible. The next best thing is, therefore, give each player a mix of overpowered, under-powered and equal opponents, where on the OVERALL scheme of things, the first two cancel out and result in a balance in term of wins whereas the last determines the outcome based on your own abilities.
So having some vastly over powered opponent does not immediately make it unfair.
Unfortunately, masuri isn't pulling off the "overall" balanced bit. I rarely have a balanced mix of overpowered and underpowered opponent, and the equal component is too small (only 1 or 2 usually) for it to actually truly dependent on my own abilities. That said however, there is almost always a mix of them, so it's not nearly as bad as some people make it out to be. And as one of the top 5-10 PvP player of my server, I have to say that it is far more balanced than me steam rolling through the event against mostly weaker opponents, so Xserver, while reducing my reward sometimes(since I otherwise get all 5s), is good for the game despite its imperfections.
*only a small fraction of total player play it at any single given time, given the large time window, and most of those are already fighting and not in queue. I won't expect more than 20 players in queue at any given time