actually, considering that any pokemon can be used (though not advised) and can compete in the overused level. It's pretty good
You give yourself a slight disadvantage by doing so, but some of the less used pokemon have advantages over the most used
on a casual level, yes, it is extremely unbalanced, but on a competitive level, it is one of the most thoroughly complicated strategy and prediction games there is
(seriously, there are about 800 pokemon. Narrow that down to 500 to 600 if you do not include base forms and then subtract the overpowered giveaways that you can not use in competition anyway and you have a very balanced game with a ton of variety
it isn't balannced on the casual level, but then again, neither is the fun of the casual level decided by winning but instead by what pokemon you have and finding new friends and ways to play pokemon
there's a reason Pokemon went global and still is