I read the first, second and last page and the same combatants are at it still, but appear to have moved on to arguing about the argumentation rather than the topic at hand so forgive me if I just drop my thoughts instead of partaking in the current discussion.
Oblivion soured me and a lot of folks on level scaling I think, and made many think that Oblivion's way of doing it is what level scaling is. Meeting random bandits in the game's best armour who stick you up for a 100 coins epitomized the concept for me.
I have since learned that this is not generally the case; Skyrim, to take an example close at hand, makes a couple of important improvements in the form of minimum levels for zones and by saving the level you are when you first enter a zone. Both are levelled at the general complaint of never running into dangerous enemies, and the lack of a feeling of increased power you can get when going back to zone you were too weak for the first time. I also believe they skipped giving random bandits quite so high end equipment. I'd say the game doesn't entirely succeed in making good use of level scaling, but it's certainly an improvement over Oblivion.
As mentioned on the first page of the thread, there are also games where you don't really notice the level scaling, like BG2, which I think made good use of it - in combination with the really difficult, optional, non-scaled encounters (provided you didn't cheese them) with loot to match. BG2 would have been a worse game without the level scaling, since there was so much optional content that the difficulty could easily have gone out of whack.
So, yeah. I think in a game with a lot of optional content that boosts the party's power, some amount of level scaling is likely unavoidable for an optimal play experience.