MFN-1 suffered from a bug when the coaches were generated that made them all mediocre, so there is not a great group of coaches to choose from. I think it got fixed before MFN-2 was launched.
New coaches are generated every offseason; they are generated usually around the middle of the pack, but like players they will trend in one direction or another. It will just take a while for the MFN-1 coaches to normalize because of the issues when they were first generated.