I always just assumed that they scaled down their team's power to match that of their opponent. This would be based off the number of gym badges that the player had, so that the trainers could improve their abilities without hitting a damned brick wall near the very beginning of their journey.<br/><br/>gotta think, how many young and wide eyed trainers would really wanna stick around if they just get their asses handed to them by the Gym leaders? I mean, imagine starting out in Pokemon Red/Blue and fighting Brock's team from Gold/Silver.