I like to think that Cynthia Steven and Diantha etc didn't participate in the original PWC where Leon first became World Champion by beating Lance. But after he did that, and his legendary status as the unbeatable, they got very interested in surpassing him and entered the tournament, giving us the first Masters 8 which featured all the champions upto that point
Makes it more satisfying to think about
This isn't logical.
Plus, the Champions entering the tournament to "Surpass" Leon doesn't make much sense. It would make more sense for the Champions to enter to get the title of being the strongest trainer in the world.
I mean, Cynthia, Steven and Diantha could easily request an official battle with Leon and challenge him outside the PWC setting if it was just about battling him. Unlike Ash, the former 3 are celebrities and actual Regional champions from credible leagues.
Plus, makes no sense to think that they all started the exact time Ash had. I mean, Ash barely had any roadblocks in the tournament outside of the small struggle after his initial loss against Bea. Cynthia was already in the Master Class even before Ash entered the Hyper Class; based on Volkner's comments post their battle.
Additionally, Leon seemed to know all of their battle styles and have a good idea of how strong the rest of them were.
I think Lance is being necessarily looked down upon. Diantha wasn't necessarily superior to Lance. One crucial reason she came out ahead was that she was able to predict Lance's last strategy. If she hadn't done this, the battle could've gone the other way.
That said, I do agree Lance doesn't seem stronger than Steven or Diantha (And the writers seem to see this as well based on how they allocated the ranks). Maybe Leon defeated Cynthia and Steven in the last PWC? Or perhaps Cynthia defeated Steven and lost to Leon?
I mean, what if this years final tournament had Leon, Cynthia, Steven and Ash in the second block with Iris, Diantha, Lance & lain in the first block?
Even if one of them reached the finals, it doesn't mean that they are necessarily stronger than everyone in the other Block (Or at least until they beat the strongest trainer from their block).