Throwing all levels of skills into one match encourages learning in the form of a learn-or-die mentality. One can easily learn by mimicking other players around you. A great example of how lack of a skill gap in games can negatively influence the overall understanding of the game, is League of legends. Lower level players are able live in a “noob-bubble” and play without improving, because everybody around them is making the same mistakes. Being regularly obliterated by a superior player is a great way of keeping the self-perception of your skill in check with reality.
For a lot of niche games skill, based matchmaking can be a luxury, because if you just mix all players together, you will obviously be able to fill games much more quickly. Especially for players at the edges of the spectrum (very good or very bad), queue times can be very annoying, with them being 10 minutes and upwards, even in popular games like League of Legends.
You will always loose games. Even the best players on my Insurgency-server pre-matchmaking, lost roughly 20% of their games - which is impressive given that those games are usually around 7v7. But at the same time I noticed, that almost all of my own losses were very close games - myself standing at 72% winrate at the introduction of matchmaking. Most of my wins were very one-sided games and most of my losses were close, usually including teammates with massivly negative KDAs. This isn’t unexpected. If you are a player sitting at upwards of a 2⁄3 winrate, obviously, if all other players are equal, you will win the game - and generally you won’t lose unless your team balances you out. Losing these kinds of games can be way more frustrating, than just losing because individual opponents performed better. At the same time for beginners and casual players, it’s not just that you will loose a lot of games, you might also face the frustration of the better players that loose because of you.
Playing against worse players encourages the development of so noob-bashing tactics, meaning tactics which will only be effective against people who have a limited understanding of the game. I play very competitive in Insurgency (a non matchmade game) and I see it all the time on my own play-style: If I’d play against myself, I’d carefully check every corner, slowly gain grounds on the map and switch positions after kills. However the fact of the matter is: Against a bunch of mediocre players it’s usually a lot better to just brainlessly rush forward before they can properly react, changing positions is usually unnecessary and instead of covering the most important positions, you just run to the positions which cover the most space. If you wanted to have a high winrate, the game often degraded into farming as much noobs as possible, rather than playing well in a general.
That’s not a trivial question to answer. I’ve played many games with and without rating systems and I think the answer is: Rating systems and skill based matchmaking do not per-se increase toxicity. At least not if they are implemented in an understandable and transparent way. Something that does worsen players attitudes, are systems that do not clearly draw a line between a highscore like system and a matching system. This often causes people to see the very system that is keeping their games balanced, as an obstacle to a higher score. Statements like “I lost rating because of you.” or developers that think “resetting” a rating system is a sensible idea, are often the next step.