Here there actually be monsters

Ye olde TL;DR - Not scaling encounters to character levels pushes players and their characters to reach progressional momentum.

Most modern-style tabletop RPGs instruct the Referee to only confront player characters (PCs) with enemies whose levels are within a narrow band. The boundaries of this band are usually just above and comfortably below the level of the PCs. And because, in practice, the upper tiers of this range are reserved for climactic points in campaigns, this means encounters nearly always favor the PCs.

Thus, wherever the PCs go, they can best their foes with minimal to moderate effort. This holds even when they travel to some locale, level up, and return there. Enemies still pose no more, and no less, than an intermediate obstacle.

Fixing the characters’ odds by breaking the world

This is not realistic in even the most fantastical of universes. No setting, real or fictional, should privilege any single perspective or subject--a world should not bow before the protagonist. It strains the suspension of disbelief when a game world confronts PCs solely with what they (and their players) can handle and withholds what they can’t. Sometimes people stumble into extremely dangerous straits without meaning to. To preclude this strips the world of dimensionality.

Ironically, scaling encounters in the name of balance, as is often the justification for doing so, actually upsets the game’s dynamic equilibrium. If 95% of the world shrinks to be, at most, as strong as the PCs (and the other 5% mostly stays out of their way), this is unbalanced by definition. True balance would require that, after accounting for all the game world’s forces, there is parity. In this way, on average, the game world will be as threatening to the PCs as their distance below the median level of the forces that hold it together. For most of the PCs’ existences, the world should be extremely deadly to them, and only pretty deadly if they choose their undertaking judiciously.

Gaining experience, not just XP

A world with a roughly even distribution of threat levels which are unchanging once set--what I call a “systemically balanced” world--counterposes the PCs with truly formidable challenges. This has two major effects.

First, it pushes players to play more creatively. In a systematically balanced environment, players can’t just sit back and assume that applying their characters’ strengths in the most obvious way will be enough. And picking fight after fight to gain XP is definitely not a realistic option. In Original Dungeons & Dragons (1974) and systems like it, fighting most anything head-on at level 1 is still hard, even for Fighters. The overwhelming lethality of combat forces players to seek viable alternatives, inducing critical, outside-the-box problem-solving.

Second, once they overcome the harrowing encounters between them and their first character advancement, players will have reached a progressional momentum for both their character and themselves. When they overcome serious threats to their character, the player is primed for the more sophisticated problem-solving that higher-level encounters require. Within the game world, the character has an encouraging win under their belt, giving them the motivation to continue adventuring.

The measure of a Fightin’ Man/Woman

As an added bonus, systematically balanced worlds offer a more objective yardstick for character growth than worlds strictly and literally scaled to character level. If 95% of all entities are no stronger than the PCs, how do you know if the characters have actually progressed? It is functionally imperceptible. On the other hand, if everything in the world stays at its original level, more and more classes of encounter will drop below your character’s level, making gains more appreciable. That’s not to say that the game gets easier, just that less things are existentially threatening to your characters--those that remain so are dangerous in increasingly insidious and intractable ways, enticing thrill-seeking players/PCs to go to the lengths to seek them out.

In a word, the world comes alive when it offers (at least at first) death at every turn. Survival is all the more remarkable, and instructive.