Pokemon Stadium is...very difficult if you play it using only Rental Pokemon. You have to squint really hard for good 'Mons with decent movesets and even then, the AI's Pokemon is always stronger than yours in Round 2. Nevertheless, I did in fact beat the game in a Rentals-Only playthrough.
I can't say the same for Pokemon Stadium 2 where I have had the (dis)honor of witnessing the most bullshit of bullshit I've put up with in a video game. Pokemon is a completely different beast when the AI doesn't have the same limitations placed upon you as a player, and I swear you will never ever feel more discouraged playing a video game than when you can correctly tell when the game is about to pass the bullshit your way turn after turn.
An example of this? The AI knows when a freeze chance will occur in their favor. How do I know this? Because a completely nonthreatening Marowak's Blizzard was used on the Rental Poliwrath I took to Pryce's gym. Every time it did this, my Pokemon was frozen. The game is allowed to know when things pan out in it's favor so much so that even abusing saved states the game is constantly making life miserable. (If you save state in the Challenge Cup, for example, unless you're at the roster selection screen specifically, then the Pokemon teams you fight each round are randomized every time.)
I gotta be honest though, still probably the best experience I've had with Pokemon in ages, even if I still haven't fully completed my Rentals-Only run.