No there was never a 500-1 team ever. Just getting that out of the way.
Secondly, (I swear I already mentioned this) but when you start ranked you start around your teams combined solo queue elo. (Ie, if my teams around 1200 elo, my first 0-0 game wont be against a 2000 average elo team) -- So, if I go 5-0, and a 2000 elo team goes 5-0, we wont be together - they'll likely be around 1700, while I'd be around 1400. Because you start around your teams solo queue elo, being a lower elo will take more wins to get a higher elo. But, after like 50 games, a team with significantly more wins will have a higher elo. Because win/loss determines your elo - you're just not starting at the same point, since starting point is based off the teams average solo queue elo. So it is a fair way of doing ratings, and gets people around their skill. If they deserve to be against better players, they'll win to the point that they play against their skill level. So, for Ranked5s it is 100% fair.
You could argue solo queue is unfair because of random teammates, but it's just as fair. If you look at it, a solo queue game, your team has YOU + 4 randoms, and the other team has 5 randoms. The odds are slightly in your favor, assuming you're a good player who can carry a game. There is a better chance 5 randoms has a troll than 4 randoms. Duo queue raises your chances even more. Ranked gets you to the rating you deserve. The rating system is good.