I can not believe that I read threw all this drivel, but now when I did, I feel the need to comment...
First of all, about all those flaming him for comparing an rpg to an mmo... It is just incredible stupid, the comparison is valid, even if they are different types of games. It is like saying you can not compare this game to the real world, because one is a computer game and the other is not... there is still similarities duh....
Secondly, to those saying that the level scaling only works for pure fighters, and that training the non combat skills breaks the balance... Smithing is the most OP skills fighting-wise. You can get the best possible armor for your current level, you can also improve it to about double (yes double!

) the stats of their normal version. That is a 2x in your fighting prowess right there. As for enchanting, it is even more op, 0 cost destruction spells? :/
On the other hand, skills like lockpicking, speach and alchemy is less useful in combat situations, but they are also much harder to power lvl. And if you really do sit down and break off 200 lockpicks in one lock to up your skill, then don't go around complaining about the game being unbalanced, because grinding one skill like that is not how this game was meant to be played.
Now to the issue at hand, the level scaling. I for one think it works quite well as it is, my only problem with the current game (apart from the crashes and occasional texture crash) is the difficulty of dragons. Their power is sufficient, but their terrible tactics make them super easy. Flying away after each blast of ice lets you recover way to easy, and why they are nibbling at you instead of just eating your face in melee combat, i do not know...
the level scaling is so that you can enjoy the whole world, throughout the game. If there where no level scaling, later in the game, you would have to go threw dozens of level 10 scaled dungeons to find one that is actually changeling for your level, and vise versa. No thanks!
If you really are so stupid to max smithing, but since you made nothing but iron daggers have no gear to put on, then go out and complain about the world not being to scale, then you deserve it. The game scales as if you actually have the armor that you now can make...And if all els fails, you can always turn down the dificulty if you want to role-play and only focus on non-combat skills. But where is the realism in being able to slay a dragon with no combat training what so ever?
/toggle.idioticrant