This has hardly anything to do with encouragement, learning or fun if a makeshift warband is thrown at two organized warbands and their pug entourage. If you really were interested in any of that, you would setup a proper training environment, repeat a few proper sparring matches (with even odds) over a period of two or three weeks, until people feel comfortable and are organized enough to compete with you.
Peter, I am disappointed - as if I'd care about elitism. Its this two-faced nonsense that could easily amount to a mild case of borderline, that rubs me the wrong way.
If people would want competition, they'd allow and help opposition to form and get up to notch - expecting just about anything to change in a completly chaotic (read: severly skewed) environment is intellectually dishonest.
It is as if you'd toss a bunch of kindergarteners into any kind of professional sports league, there is neither progress to be made nor competition to be had, just some twisted padding of egos - feel good because you encourage them and let them participate, feel even better because you effortlessly squash their efforts.
That aside, acknowledgement of progress is vital to learning and general psychological workings - try to test/train things in the setting the both you consider reasonable... even if it happens to be a success in the first instance you'll invetiable encounter the 'blob' - either ingame or on these forums as a means of dismissal (if its not 'blob', its another poor excuse to dismiss) - and fail in the second instance.
There is a limit to the hurdles you can overcome, even in hypothetical, utopian circlejerks - namely years of practice and organization, let alone third-party factors of sorts
Why do you think the order guilds that are already around and trying compete fail so miserably? Hint: Their incompetence just one part of the problem.