There's also a sense of progression. Many people enjoy seeing their character grow and get stronger, so more incremental steps aids that too. You could naturally argue that there's no point in the end, but if you really wanna get philosophical, there's a whole life discussion about that. In the end of the day, we enjoy what we enjoy. The sense of moving forward is a very human need to tickle.
If there's one thing I always liked about the D&D ruleset and a lot of old school systems is precisely that every single level up (especially at first) is a big deal, rather than a recurring and almost-trivial ramp up in numbers.
