Well we are bad. No question.
Though I think you're onto something adding a new division below bronze. As the game scales up adding more and more players, if most of them pile to bronze, there is probably a wide variation of skill without even those players. A variation beyond the scope of 5 tiers.
It spirals out of control pretty fast. Since people are so bad in bronze, better players (smurfs) can come in and rofl(troll) them, creating all sorts of crazy numbers in the system and screwing up peoples mmr. As well as quitters and ragers, afks, bad players(most players) Players can more easily get carried, players that shouldn't win games win games- gain mmr and suddenly they are in our games.
Until the system takes into calculation individual play in some way shape or form, the ladder will always be inaccurate. This is most evident in low elo where skill levels are just all over the place. The system shows its true form under the true test. Can it balance the ladder in bronze. lol Is it even possible? lol
There are more and more posts about how low elo feels like luck. Well, people aren't crazy. It feels like luck because its inconsistent in its matching.
I played a game the other day where a plat smurf kat decimated midlane, then came bot and double killed us under turret at 10 minutes. Fun.
Point being that there are many things effecting mmr outside of my individual play, so whatever that number is, its horseshit unless matchmaking is doing its job well. If it was, then it could be accurate, but when a systems accuracy is based on the systems accuracy itself... you have an issue.
Players in high elo say mmr works. I have a diamond friend that agrees its busted, but generally bronze people can't be smart and we generally don't know what we're talking about in any state, because we're bad. To which I would generally agree, but there are players in bronze that are better than bronze. No question.
I say if it doesn't work in low elo, it doesn't work in high either. If something doesn't work, it doesn't work, even if its correct here and there. The reason people think it works in high elo is because the skillgaps are much smaller the higher you go in elo. Its much more difficult to see the discrepancies, whereas in low elo its super easy to see them.