So far it seems like close to every one here prefers the latter.
I suspect that more people here than you might think actually would prefer to not become godly, however the way the engine is set up it's difficult to properly scale the opposition against a really high-level player character.
Oblivion scaling went massively overboard in the HP department, which resulted in a fricking
Goblin being able to tank up to 30 or so max-damage hits during a fight that took 15 minutes. As a result, whenever people suggest
any form of level-scaling a tidal wave of complaints comes pouring forth because
nobody wants to see that mess return.
Unfortunately, level-scaling really is the only way we're going to have anything even remotely resembling a challenge past about L20 or so, but proper implementation thereof is fairly tricky to pull off. Overdo the HP and you have the Oblivion problem all over again, overdo the damage scaling and it's the Overlord/Hillfolk problem from FO3.
NPCs, at least, can have this at least partially handled in the quality of their equipment: as the NPC's level increases, draw from two leveled lists with progressively better Tier and Condition weapons and armor. NPCs should also increase the quality of their ammo, ultimately using either Hand-Load or Max Charge ammo; progression would roughly be HP/standard--->standard/OC--->hand-load/MC. A L40 (or 50) NPC would thus have the best quality and condition armor their faction possesses while wielding one of the best weapons with either hand-load or MC ammo as appropriate.
Creatures are a bit harder to scale, since their 'weaponry' and 'armor' only have one grade and ignore condition. Deathclaws have partial scaling already built-in; they get a massive damage bonus that makes it appear they are bypassing DT, and have multiple 'ranks' you can fight, all the way up to the Legendary one. However, their damage and HP are fixed, so once you get heavy weapons they have no chance as they never get to hit you and apply all that damage. The best thing would probably be to use these as 'base' values and ad a small scaling factor, while also having a HP cap in order to keep things reasonable (for reference, the Legendary DC has 800HP).