Unfortunately, it's far too easy for capped toons to just overskill a low-level alt and win the lower level arena 'block'. If you want a perfect example of an insanely OP toon, inspect 'Bumperassassin'. Who would win any sub-level 40 arena.
So while I agree with you that arena isn't as attractive as it should be for the lower-level people, there is no way of making it 'fair' at the bottom end either.
I play on S2, and have a level 50 toon there. Like you, he loses most fights (currently 34 wins, 252 losses).
However, do remember that you are not 'just' getting a solitary token per fight, you are getting a VERY nice bonus too - for trophies, gold, adventuring exp.
That's the way to look at it. What you ARE getting, not what you aren't.
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