Pen and Paper RPGs depend on level scaling. So level scaling, by itself, isn't the evil you claim it to be.
Sure, so far the games you may have encountered that used level scaling may have had it applied badly, but as I said, the same can be true for almost all game aspects. So no, level scaling may be a good thing for an RPG to have. And as an example of an RPG that doesn't get improved by removing level scaling, I present most Pen and Paper ones.

Ok so I refine my statement to level scaling is only evil in computer role playing single player games, happy?

Again, no. Let me give you an example of a game without level scaling, Gothic.

There is a one handed hammer guarded by a few bloodhounds that you can actually use from level two or so. All you need to do is run and dodge them, pick up the hammer, then dive into the conveniently placed river. After that, you have a weapon that deals 50 damage, so it will one-shot most things you will meet until halfway into the game, and you can safely ignore the physical stats of your character, since the hammer has a very low str requirement (22). That specific item makes most of the combat challenge irrelevant in a game that is famous for "Walk in the wrong place, you're worm-food". Wouldn't a proper challenge be better than steam-rolling through combat? Especially since with said hammer you can safely knock-out most people you meet in the camps and steal all their equipment? So why should a low level character have access to said equipment before he needs to? Would you enjoy playing Might and Magic 6 if your level one characters had access to fly and blasters?

So again, level scaling done properly is a good thing, level scaling done lazily is a bad thing, but so is anything done lazily.

You shouldn't have access to top tier loot and become an all powerful demi-god before the end game, if you are able to do it while only exploring 10% of the world then the issue is not the lack of scaling but that the game is broken. (Yes Xenoblade I am talking about you!)

If anything I would say that level scaling actually promote "get phat loot" as you call it and actually it works very well for for Diablo-like A-RPGs where the biggest intensive of the game is to fight stronger and stronger monster to get better and better loot for it.

Then why have 300+ location ? Wouldn't it be better to have 30+ interesting and fully fleshed locations rather than 300+ where 90% is just a repeat of the previous one with some level scaling monsters, same goes with quests; personally I prefer quality over quantity.

No, thats the false conclusion from your example. The right conclusion would be that the item/stat system in Gothic is too badly designed if one item can ruin the whole game. In MM6 it wouldn't be such a big deal to find mad phatz in the beginning.
That is all ignoring of course that you would have to know how to find this hammer in Gothic, which you wouldnt when playing normally.

Morrowind had level scaling and yet if you play with enchantment you can easily have access to daedric weapons, armor and even powerful spell very early in the game and steam-roll through the rest of it.

The hammer you mention, like the Morrowind enchantment exploit (don't know if it has been patched since the last time I played the game though) are an issue of bad game design/bug/exploit, not an issue of having or not level scaling.

You normally find it in the 3rd chapter. At that point, it's not overpowered. Weren't you the one that was advocating dodging Giants, Titans and Dragons to reach a few high level chests in M&M6? How is that different from what I'm saying in Gothic?

Oh, and the first 2 Might and Magics also had level scaling, but only for the random encounters. Set encounters were level set, so while you could grind your way to defeating the set encounters, the grinding would remain challenging. And I also think that if you imported your party, the first encounters were of higher level than if you created a new one. May be mixing it with Wizardry or Bard's Tale though.
And that is exactly my point. A good designed game doesn't care for level scaling, it will remain challenging and entertaining wether it has or hasn't level scaling. You can't do a broad statement like "It has level scaling, thus it will suck" and expect it to hold true, since it is possible to have level scaling and still be an excellent game.

Yes it is different because that getting good stuff does not ruin the game. Hey and if its fun for you to find that hammer in Gothic in level 1 then go for it, thats the beauty of no level scaling, you can play the way YOU WANT. Isnt that great?

Good design will not benefit from level scaling, but it can be ruined by it, thats the whole point you are missing.

Nope. Good design can benefit from level scaling. Bad design can be ruined by no level scaling. Bad design can ruin anything you give it, and be ruined by anything it is given.

Example of Good Design benefitting from level scaling. Torchlight. Main dungeon has a set level, optional quests scale to your level. If you find the main dungeon too hard, grind the extra content a bit, level up, then steam roll through the main quest. If you find the main quest properly challenging, ignore the side quests until you are done with the main quest, challenge (and fun) will remain solid.
Alternatively, level scaling with specific caps. The bandit you meet may be from level 1 to level 10, but won't level more, because he is still a bandit. Going to the Bandit's Lair when you are supposed to go there (levels 3-7) will give you a challenge, but going there when you are lvl 30 won't be a challenge. That is also level scaling.

Want more examples? Unreal Tournament. The bots' level was adjusted according to your own. If you were fragging bots left and right, they would get better until they gave you a challenge (yeah, right). If the bots kept fragging you, they would start making mistakes, allowing you to still have a chance against them.

And finally, HAL was also set to lose 50% of the games, how much more level scaling is there? ;)

Personally, I dislike grinding. The idea that I have to go and repeat content so I get stronger to be able to defeat the current gearcheck does irritate me quite a bit. Especially since I do (or did) thoroughly clear each area I was when I was visiting it, so telling me that clearing everything isn't enough to be strong enough to continue tells me that the game is bloated.
Don't recall anything like that in M&M6, though I recall playing Clouds of Xeen and then moving (with the same party) to Darkside of Xeen, and getting bored out of my mind when I was steam-rolling everything.

So again, a Good Design will make proper use of level scaling (like Unreal Tournament, which you ignored), and I like my games to be challenging and not depending on me grinding.

So again, Level Scaling by itself isn't evil. Specific implementations may be, and some games may be better without it. But do not make broad statements that "Element X means the game will suck".

23 dragon shouts available at 55 locations in Skyrim. Reduced to 10-20% resulting in max. 6 shouts at 11 locations. Or going with, let's say 50%, giving 12 shouts separated on 30 locations. Note that we've not even counted in main / guild quests.... you think you had a better Skyrim that way? I certainly don't.

There are plenty of RPGs out there doing exactly what you propose. Most of them falling in the "on rails" trap. There's one other (Gothic 2) coming even close to what Bethesda did with Skyrim / TES or Fallout 3 / Obsidian with F:NV in general and exactly one coming, which might be able to go for it, which is The Witcher 3. And that within the last 10 years. No, I certainly don't want them to change that....

No idea if you missed it, but as pointed out, you can get endgame items in Morrowind / Skyrim early on too. As with your hammer example, you just have to know where to go / look. Even WITH level scaling.....

Haha, I POLITELY ignored Unreal Tournament because its a multiplayer shooting game . I grant you that multiplayer deathmatch with bots can be improved by scaling, ok? (I invite any shooter expert to duiscuss if even that is true)

But again, level scaling in single player CRPGs is evil and does only improve bad game design while ruining otherwise good games like Oblivion.

Edit: Yes Siannah, well repeated, now you can read my reply to that again,too.

So M&M2 would be improved if your party only encountered set level enemies instead of scaled? Would Wizardry 8 be better if there was no level scaling? Would Nethack? How about Baldur's Gate 2?
All of the above games do have level scaling, though different amounts or implementation of it. Some of them only scale enemies one way (up), others scale them both ways, a few scale random encounters only, and some more use more numbers to scale (level and dungeon depth). But I guess all the above examples are ruined by using level scaling, and that is unfortunate...

Level Scaling isn't evil. Lazy implementation of it is.

BG2 only had scaling on the critical-path afaik, the side quests didn't scale