I think the writers pushed Margo into being a actual rival for Brandy to add more conflicting characters other than Gaspar. Margo, along with that lizard and other girl, are made out as the stereotypical prep in-crowd. Thus, it gives some peer pressure for Brandy to coop with.
I much preferred Margo as she started out in the series. She was still pretty high on herself, but she wasn't to the point of having a "clique", if ya know what I mean.
She never was a fav' character of mine, but I can see her as a necessary evil for the show. There always has to be a rogue gallery to some degree for the star(s) of a show, and one mainstay villian in Gaspar just couldn't hold out on his own - despite how entertaining him and his monkey minions are. There's always a need to change the pace from time to time.
Now the one character I can definitely do without is Gabriella (did I spell that right?) I just can't stand that lizard woman. There's the bad guys/gals ya love to hate, but with her, I hate to even hear her snotty blank-blankness. If Margo's a amp'ed up version of Brandy's original snobbiness, the lizard is the pinnacle of the show's snobbiness. I thought she worked good for the beauty pageant ep as Gaspar's main squeeze, but what few eps she showed up in after that, I couldn't wait for her to get off-screen.