I assume the reason why we keep getting put with ppl <lvl 10 (except from their obvious abundance) is that MM considers a lvl 8 player with 70% win ratio to be as capable as a lvl 40 with the same win/loss. Thing is, a game's outcome depends more on experience rather than actual skill, and it's only after a significant amount of games that actual skill becomes discernible and matters more than playtime. A quick solution, as others have suggested, would be to have people below a certain average level be put into a different matchmaking pool, and lift this restriction only in cases of low population.
I'm pretty sure that with time, if proper tweaks are made to the MM system (restrictions it places, rating deviation it allows, factors it includes when calculating rating etc), and as each players' rating stabilizes, average lobby quality will improve. Eric has, after all, already stated that the future goal would be to allow matching players only from the same 'leagues' or skill tiers. This combined with a stricter matchmaker has to quarantee some lobby balance and quality, or at least so I hope.