Actually, it IS happening with legendaries. Earlier today I was hunting on the GTS for an easy-peasy Dialga. Sure enough, I saw a Level 1 Shiny Dialga labelled "SUPER-DUPER-PERFECT" or something like that. I didn't go for it, since it was hacked and was asking for a Darkrai (something noone has for some reason...) but yeah. Servers are acting a little fishy if that got the A-OK.
lv 1 Dialga, Palkia, and Giratina ARE legitimate though! (there's one of the games that you take an Event Arceus to some place or another and it creates Dialga, Palkia or Giratina at level 1. People REALLY need to stop just assuming EVERYTHING is a hack, although with that name, it likely is, but level 1 IS legit) and the reason why no one seems to have a darkrai is because all the legitimate ones cannot be traded on the GTS. They're like the Event Torchic, basically.
I've seen hacked Pokémon, too. Level 5 Jirachi on GTS and in trades caught in a Master Ball. Hopefully, patches will be added soon to eliminate the ability to transfer hacked Pokémon.
The master ball is suspicious, but since 2003 it's ALWAYS been released at level 5 (except for the 2013 event)
https://www.serebii.net/events/dex/385.shtml so again, the level is not an indication of it being hacked. The master ball on the other hand, okay, I'll give you that one.
People do this sort of stuff to save time and energy and such; it's nothing new. I personally don't have any issues with that. It doesn't matter if the Pokémon's hacked or not, but as long as it looks legitimate, I'm fine. :] By the way, we already have a thread going on about Pokémon Bank; I'm merging your topic with that. Hope you don't mind!
Merged.
I personally used to do it simply to get the pokemon I can't go to events for, or to get pokemon that were given out before I owned the games. Now, however, with wifi and the GTS, I have been getting legendaries left and right with shinies, and yesterday I got a Reshiram and Zekrom for two of my 6IV Zoruas, and then a Registeel for a 5IV Naive Zorua (everything but SpDef had 31 IVs) and none of those 3 were shiny, so if you're patient enough you can get all the legendaries eventually