IMO arenas suck for that very reason. Ever since I rerolled just prior to TBC and arrived at 70 mid S2 and was out geared virtually the entire time I just didn't find it enjoyable. The ratings on gear are a step in making it fair, but what needs to be done to truly make it fair is you need to maintain that rating to equip the gear. If you're really that good, it shouldn't be an issue. Remaking a team to try a new comp? Why should you get to steamroll me as a fresh 70. "Hey, it's not the gear keeping you dopwn." I wouldn't know, w/o gear facing a geared opponent I drop to fast to really find out.
The current system makes it impossible to a new player to see what works and what doesn't.

I suck enough in arenas, I'd rather just play other players that suck as well. It adds insult to injury that I have to play titled players decked in full s4 while losing points to them, losing the points and ratings I need to obtain gear to compete with them in a ratings bracket that can't even obtain me more than 1 peice of s4.

However, I believe the current system is working as intended. The nutty players, it keeps them coming back for more. Most everyone else, win one here win one there.......just enough for you to keep coming back for more. Just like the "DING DING DING" on a slot machine, giving you just enough reward to come back for more. I have no doubt Blizzard contracted out to psychologists to get just enough balance, just enough reward to keep us hooked.