Levi does suck when it comes to power but she has other assets (the main one being she's cute and popular). As for Canna, she's not so bad, she just got a raw deal with her opponent in the Laxus arc.

Gajeel and the elemental 4 were S rank mages within their own guild but these aren't universally recognized titles like in naruto, it just means the guild recognizes their ability and allows them to take S rank missions

Basically, Fairy Tail has higher standards than Phantom Lord