In game development, one of the most gut wrenching things a developer can do to a player is take away something they earned. You worked hard to save that person, well they just dies when you went to make your escape. You got your amazing weapon of destiny? Turns out it has lost all of it's power over the ages and now it's just symbolic. Things like this are the devs version of a dramatic bombshell, not a precision tool to be thrown around.
Right now, due to the current stat systems, leveling feels this way and that MUST change. If they do nothing else, at the very least in presentation it should not feel like leveling up is actively hurting you. I could rattle off for hours about why systems like this don't work and also don;t feel good to the player (like Final Fantasy 8) but I honestly hope that there is no need to. There are an almost infinite number of ways to handle stats and the current system is one of the worst that exists, it needs to go.
