Almost all enemies encountered so far are only strong relative to their extremely-weak peers, but consider themselves exceptional : Hamsuke, that Undead King dude, Udyr, the angel summon dudes, etc.

Elf king, however, considers himself only strong relative to his extremely-weak peers, but is actually exceptional. Being certainly the son of a Player (one of the 8 GK), he is by default hilariously stronger than anything native to NW, and is also certainly extremely high lvl from training by his father (who was aware of the EXP system and how to minmax it).

He's therefore wholly unsuccessful in making strong Elves because he's critically lacking data : he thinks any elf can reach his potential eventually (arguing that he's just a normal Elf, not an Elf Lord or High Elf or other superior evolution, so anyone should be able to reach his level) if they weren't useless weaklings - which is completely false - and seems totally unaware of the leveling system.

Even though he's an asshole eugenist, that part is ironically the only thing he got right - his children are naturally magnitudes stronger than a normal Elf, and have a much higher potential for growth.

The problem is that he's treating them like shit so they have 0 will to live, and sends them out to fight armies while being lv1, so they get killed without being able to level up.

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He could be a threat to Nazarick if he actually thought himself as exceptional in the correct way and planned around that (e.g., by powerleveling his children), but his "humility" is his undoing.