Its super important to also try to play w/ people who are better than you so you can learn from them and also play vs better teams(not gonna get anywhere by mashing low rated over and over or staying at a constant level).
Not true. I'm not trying to step on your toes, don't get feral on me. But translating your point into sports to make this more obvious: You are saying that you would not be able to improve (physically) by training alone or with / against other people unless you get to the Olympics and compete against the best. - But WoW is different, it's not a sports, bla bla, yea I know.
I am living proof that playing on an average rating against average players is a very good way to improve. I don't need super-experienced top-class players to tell me what to do if I can recognize my own mistakes and do it better next time. Improvement is self-improvement, and even when you get to play with the best and get some title, what will you do once you're playing with mediocre players again? There's nobody to tell you what to do and then what, you gonna suck? Maybe, maybe not. But you will certainly not be able to help other players who once like you sought advice to improve themselves because your range of knowledge does not encompass a critical viewpoint on gameplay.
In low rated arena many mistakes are made on your enemies' side, yes, doesn't mean you can't spot them, use them against the enemy, use them to your advantage, but in order to first realize any mistakes you'd have to have a critical mindset, look at things and wonder why that happened, why that choice was made, were there other options etc. The key to becoming "the best" in anything is posing the question "why?" and learn from its answer. Like in real life. Awkwardly!