Quality of teams may be similar on start of season. As soon as teams start buying new players, teams in higher level can buy better ones and can build a higher quality team. That's why you may face much higher quality team as reaching later stages in Cup.

In T11 Cup, higher level teams have access better players. In real world, unlike T11 world, higher level teams participating domestic cups are usually richer and are able to afford to buy more expensive players.

I also think it is fairer in real world. But I still think one mixed level competition makes T11 game more interesting.