I quite like the idea of levelling up being used in other genres. It's a way for the game to be more thoroughly enjoyed by more gamers.
I know a lot of people like the elitism of being able to finish a hard game, but frankly I don't really see the logic in spending X amount of time on a game, to only have a small percentage of people really experience it fully.
What I think needs done is for developers to appreciate that when it comes to difficulty that not everyone wants the same thing. In the case of most action games, and shooters selectable difficulty levels are the norm, but why doesn't this apply to other genres like platformers or rpgs. Why don't games like FF and Zelda (being too examples I can think of that have had flak for being too easy) have selectable difficulty levels? I think there is no reason for them not to.
I also think that any suposed loss of elitism can be answered by the way people make there own challenges, such as low level runs.
Slightly off of levelling balance but I thought FFVI had a nice levelling idea that I'd like more games to copy, and that's when you died and restarted at a save point you kept the experience from when you died rather than from when you last saved. I think the psychological effect that it had on the levelling process was subtle but important for the gameplaying experience. It encourages the player to just keep pressing forward and enjoy the game, rather than occassionaly breaking from the game in order to do a leveling up grind. Ninja Gaiden strikes me as a recent game that would have benefitted from such a system.
And that's all I have to say about that.