Bah, I like the leveling. It gives a more realistic feeling to the game - you don't become the most powerful being in the world in 40 days, you just finetune your srengths and augment them to become more and more effective against creatures/foes that do not become a breeze to take out with one strike.
Anyway, it's not that the random highwayman will be a huge problem when you are lvl 40, methinks... or so I assume, I haven't gone past lvl 5 yet, but isn't the lvl of several creatrues, troop types etc. capped at some point? So that you progress after that point but they don't?