Considering that Baldur's Gate, the corner stone of this game genre (i'm not counting pen and paper games), was published in 1998 and that PoE (clearly a descendant of that) still has a cap level mechanic after 17 years, maybe there is a good reason for it. Also, let us not forget that obsidian was created by some of the guys who worked for black isle, the studio that basically created BG (if i am not mistaken).
PoE, like BG etc., is basically a pen and paper RPG adventure/campaign. You start from xp level X (1 in PoE) and end up at most at xp level X+n (12 in PoE), since the publisher has already planned to span the story on more than one adventure module (meaning PoE). Usually pen and paper modules have a minimum ending xp level which is not much lower than the maxium (ie. 1-2 xp levels for short modules). The main difference between a classic adventure module and games like BG is that you don't need a game master nor friends to play with, meaning that your adventure module will be potentially bought by a far greater audience. This means greater incomes (by several order of magnitude I believe), but also the need to target all kind of people, both the old school guys and the rest of the rpg world guys (not to mention "casual" players). Since not all people like to througly search each square inch of a dungeon, you have to make a compromise on the maximum level of experience a player can get, aka xp cap level, otherwise you will break the adventure module.
I'll say it again, this is not a diablo-like game, where monsters are constantly respawned and their power level scaled to match that of the player, this is an old school rpg adventure module. In this part of the adventure the PC and NPC are supposed to rise from level 1 to level 12.
That said, maybe it's possible to introduce a game mode that allows PC and NPC to level up to the maximum xp level, but in this case the game creators will need to make impossible to import such characters in any future expansion/sequel of PoE.