That was Reptile in MK1, it is a known fact. Only his moveset wasn't canon, but his appearance was indeed canon, just like Noob Saibot's appearance in MK2 was canon but his moveset wasn't. The only Ninja that his appearance in MK1 wasn't canon was Ermac, as he appeared due to a glitch only. These are all facts known since the very beginning.
Also regarding Reptile himself, none of the characters in the MK universe is truly weak. Yes some are stronger then others, but none of them is a truly weak character in the level of Dan Hibiki from Street Fighter. Also by that very logic that you come up with, the only two "top tier Ninjas" are Scorpion and Sub-Zero, as all of the others were also beaten a lot, and even both Scorpion and Sub-Zero were defeated by Johnny Cage in MKX, Yet Ermac, who lost to both Takeda and Jacqui, has defeated Johnny in MK9. Also you need to keep in mind that the MK series isn't just about MK9 and MKX and you need to take the story of entire series into account, as all of the rest of the MK games from Midway were also in the same canon with MK9 and MKX (with the exception of Shaolin Monks and MK Vs. DC), and not to mention that NRS put the focus on the protagonists for the most part in their stories, and that's true for the IJ series as well. And in the Mortal Kombat Deadly Alliance story (an MK game from the days of Midway), Reptile defeated Cyrax in a match and injured him. So you can't just put the whole conclusion on the NRS MK games alone but also on the Midway MK games.
Reptile is the most important Ninja in the series just right behind Scorpion and Sub-Zero, he is the first secret character of all fighting games (not just MK, and once again his appearance was canon), and also right behind them in terms of being recognized and memorable, and NRS do care about him just like they care about all of their characters.
As for Chameleon, it would be nice to see him back, but that's a whole different topic, and he only first appeared in MK Trilogy, and unlike Reptile of which his MK1 appearance was canon, Chameleon only got a canonical debut in MK Armageddon. The female Khameleon on the other hand did have a canonical debut in MK Trilogy though, and it was still only on the Nintendo 64 version of the game.