Use of 余裕で in this context I understand that means margin, leeway, as well as composure or comfort that seems to intuitively follow from the original meaning. However in this sentence it seems to be used in a negative sense, unless I'm misunderstanding here. The sentence itself (context is talking about band rehearsal): > 1 Is it being used here to describe him as failing by a large margin? And looking through Google, and seem to see some use as well. Any clarification or corrections of any misunderstandings I have would be appreciated.

means generally what you said. But it is sometimes used in negative situation and emphasizes the negative situation.

However it is not formal usage and mainly used among young people. Young people sometimes use a word like that, for example, "badly" in English, don't they?