I'm mostly thinking from a developer's perspective, and why CDPR may be going the way they're going.
from a dev's perspective, I think these loot (and level) systems are used for 2 reasons:
1) give the sense of progression: you become stronger throughout the adventure. Getting better (for real) apparently is not enough from a psychological point of view, you need numbers and the rewarding feeling you get when you unlock a new skill or stuff like that. And it's definetely easier to code enemies with higher stats than better AI and attack patterns.
2) devs are forcing you to be where they want when they want. Your level (and gear) is below 16, you're not going to skellige, I'm sorry. First you help the bloody baron, keira and triss, then you can go and talk with yennefer. What if I want to beat an end-game monster and get precious loot and exp. so that I can play the game in an easier way with high-end gear? No, it will kill you instantly. You're not supposed to do that otherwise the whole game's balance will be screwed.
3) the dopamine flow you get when you kill an enemy and get some epic shiny loot is something that will make "any" gamer feel rewarded and satisfied. You don't really realise it, but you like it.
I'm more amused and satisfied when I see a videogame perfectly consistent and that pays a lot of attention to little details, giving justifications, unluckily it's very rare. E.g. god of war 2018, you can't swim so:
Kratos: "never touch the water"
Atreus: "why?"
Kratos: "do you know what's under it?"
Atreus: "no, water is pitch-dark"
Kratos: "exactly" = it's dangerous
It's very easy, but it makes sense and gives a justification, a little precious detail. Then the game ruins its perfect way to limit progression (areas are unlock when water goes below their level) when it puts some high-level enemy in beginning areas so devs were forced (by themselves!) to add levels above their head so that the player knows why s/he was wrecked. Don't really know why they did that, probably to force some backtracking, but that's stuff for another topic.