I think it is bad. Why? Because it is not realistic. Monsters should either always stay at the same in their combat abilities, or can increase in ability separate from your own leveling. So a monster in a dungeon may only hit 10 health for the whole of the game, or it levels up 1 each year. How does this solve the problem of the player not being able to enter a dungeon and exit alive, or entering a dungeon feeling non-challenged? Well, you can make some loot only usable with abilities that the person has. For example, max strength is needed for some weapons. You can make the entrance covered in lava, so only people with fire-resistance can go through. You scatter awesome and lowsome things in dungeons. Some useable right away, some maybe later in the game. But they will keep them around until they can use it. You can even litter the dungeons with low and high level characters. The player can avoid some areas. This is common sense in real life, it should be common sense in games too. For example, if you are walking home as a kid you may remember an aggressive dog on certain areas, and you remember to avoid that route. When you grow up, you can go past it, because maybe you have a car (armor). Or maybe in class there is a bully you avoid, but when you are older and stronger, you may challenge the bully. Similar experiences should be natural in an RPG. Don't make areas only one type (weak level or high level NPC, or low only or high only items). Mix it up, so players can experience and choose what to do.

