Things don't have to be leveled. Say, in Fallout, where everything is mostly hand crafted, it would make sense to allow equipment to take on more difficult enemies.
I was thinking of a system a bit like Metroid's, where you never really change, but you find equipment and stuff that allows you to do things that you couldn't before.
That way, almost all items (I'm intending that they also be handcrafted, or something like) become useful, so long as they have their advantages and disadvantages. Fallout already had something along these lines, as most guns did similar damage to each other, but had greater ammunition capacity/firing rate/armor piercing ability/whatever. You might give pistols the ability to become concealed, which allows you to take a weapon into a place where you couldn't before, and need one to progress (or finish a quest, or whatever). After all, pistols aren't battle weapons.
Someone earlier used an example of some monster in the woods in Gothic. I haven't played it, but it would be just as meaningful to get something that allows you to overcome that obstacle without just being +5 levels from the last time you met?
It doesn't have to be equipment, it can be abilities. Metroid and newer platformers, like Psychonauts, generally allow you to unlock more content by gaining abilities that allow you to do things you couldn't before. Like, as a simple example, in Psychonauts, once you get Invisibility, though, you gain the ability to do a lot of things you couldn't overcome before. You can easily sneak up and damage or set on fire mega-censors and psychic bears and psychic cougars, you can sneak up and steal the gold watch from the squirrel, etc.
Psychonauts even has an EXP system for those abilities. You don't really get more health, I think you get that for accomplishing objectives, but as you get EXP for doing and collecting stuff, you get closer to new (or upgraded) abilities. That way you don't have leveled characters, but if you couldn't do without EXP you could still use that system. Like, you level up, and you get 20 skill points to spend, or whatever you like, but you don't just magically gain HP or anything like that, though this is smudging the line from a "pure" system. It would make more sense that at certain points or as rewards for certain accomplishments, instead of EXP, you are rewarded with skill points directly, or to choose a new ability. That way you can still develop your character the way you want without having to deal with levels.
Personally, I would like a tag system. Where, you don't have skill points, but when the game rewards you, you get to tag a skill. Like, if you tag Small Arms, which allows you to use small arms. You can tag it a second time (or a second skill to go in combination) which allows you to use scoped rifles competently. Or something like that.
The only snag, which I think could probably be dealt with, is how do deal with random monsters lurking about. There would have to be some sort of reward for killing them. In a post-apoc game, ammunition would be nice, or health kits or other things. In Psychonauts, killing got you ammunition, health, money, and grenade recharges. The enemies were also typically in your way and had to be dealt with. There might even be some benefits in the role-playing arena. After all, if you don't need their equipment, why would you want to get into fights? The only time you would need to fight is when something is in your way, or you are surprised, or you need some ammo, etc.
I mean, why would a Vault Dweller actually take the time to clear the cave rats out, or get into fights with 50 Enclave patrols? The player does it for EXP, of course, but otherwise it doesn't make sense unless they attack him or are in the way.
One of the things that happens here is that the world becomes MORE dangerous. You have to pick your battles, and you have to employ tricks to deal with some enemies. I mean, no human is ever going to become powerful enough to take on a dragon, or anything like that. He would have to have abilities and equipment. Goblins will still be a problem unless those equipment and abilities help him deal with them. Why does everyone think goblins should be pushovers, anyways? If they were pushovers, they wouldn't survive in your average fantasy world, especially in their typical large numbers.
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Seriously, I think my idea has merit, especially in this case. Monsters are dangerous, but if you have the tools to overcome them they aren't that much of a threat. Mighty heroes are just men, after all, but what is a goblin with a knife going to do against armor? How will it defend itself against your <s>crossbow spear lance</s> er, longsword or whatever?
The point is that early on you might be vulnerable to goblins, but they are reduced to a minor threat compared to other monsters because you have tools/abilities designed to combat them later on.
