Initially I was for a EL balance system that scale with the party level but after giving it some thought I dont think it would be great for a computer game. Some places should be off-limits simply by the fact that you cant get past the monsters, not invisible walls. If you scale everything with level you cant create an open world where the player is free to explore if you also want the player to progress through a story.
Also it doesnt make sense if you are level 3 and you meet the elite guard of the king and they're also level 3.