I also think that people who level their cards will have a better selection even if they are downgraded to level 1s.
In fact in my alt account where I don't have epics I miss those more than the legendaries. I bet people playing in the top leagues who signed up for the novice tournament all played their epics.
I bet they do to. They would be silly not to play their strongest cards. Those with money or higher level decks having more variety to pick from is a valid point but I think my point is also very valid and holds true. Its the ones who are more custom to playing at level one that will have the advantage of playing in a level 1 tournament.