Part of it is due to the scarcity of players due to the huge 3 hours window. You'd be surprised at how few players would be in the matching at any given time, which means your "closest match" is rather likely to be far far away. Not a problem with the matchmaking system in and of itself but certainly a flawed design.
And if you are not 90 yet... I think the thing, like everything else, matches via level THEN power. And sub-90 have smaller population per level and big power diversity, so power is rarely used as a factor. So it's horrible for those.
Whereas the latter problem have a relative easy fix, to be honest I don't think there is an easy way to resolve the first. There are, of course, solutions, but all of them would be bad for some players. For example, shrinking the event window would greatly reduce the dilution of players, but not everyone have a flexible schedule and it would make some people unable to participate. Similarly, increasing matching time, enforcing a minimal-time-before-matching to have a bigger buffer pool of player being matched could also work, but not everyone can afford spending a hour or more in masuri, waiting for matches.
So while I agree that it needs some kind of fix, the how is far more difficult than what you might think.