RPG Vault have posted the first part of their Online Worlds Roundtable #7. In this part they ask their expert panel what they think and how they feel about the levelling treadmill:
Levelling in and of itself is not evil, in my opinion. Levelling gives you a feeling of accomplishment and is really the fundamental component of the reward cycle in a character-driven game.
It seems to me what we are really talking about is forcing players to participate in gameplay that does not vary and presents little challenge. It also seems that we are talking about game mechanics that feel like they are in the game to only prolong gameplay and therefore prolong subscription time. I agree that many of our current crop of online games are guilty of this.