Yeah, the 3min time limit is a bit frustrating, especially when you're soooo close to KOing that last fighter.
But, SGM is not your traditional Arcade fighter (in fact 3min is almost double the average clock in an Arcade game).
Since SGM is basically an RPG with arcade fighter combat, the Win/Loss rules/logic in SGM takes some time to adjust to.
SGM offense, you're only goal is to KO all opponents before time runs out. It's kinda like an OG Sonic or Mario stage; you have a limited amount of time to reach the goal, if you don't, you lose and try again.
Also keep in mind that the goal on defense is to either KO all opponents OR stay alive for 3mins. I mean, if the offense could just run out the clock, it makes defense almost pointless. (and because defense is AI driven, it kinda needs an alt-win condition that offense doesn't have).
Like Erick Draves has already pointed out, as you progress, you'll find more and more 'tuned' teams that have a lot of HP and heal and rez abilities that makes getting that KO in time more difficult. At that point you need to come to those matches prepared with more damage and anti-heal/rez tech. You may have your favorite team that you can brute-force most wins, but eventually, you'll have to counter-pick depending on the opposition. This is the RPG side to SGM; if you don't have the right fighters/moves/abilities in your party, winning boss battles are gonna be almost impossible. GL;HF!