Since people will inevitably ask "what is leveling representative of if not the power fantasy of becoming the ubermensch?" here is an actually considered breakdown of that mechanic in videogames.
What's important to notice is that hardcore purists from all angles dislike leveling. Ragged Jack Scarlet notes that the "artistic" "mumblecore" side dislike it for how it distracts from the story. But hardcore gamists also disdain leveling. In the words of Tim Rogers, your level is "a number the game gives you" and attachment to it can border on fetishism. To them, games should reward real skill more than how long you have grinded.
So who likes leveling? The great mass in the middle, The players who come home, turn on the game, and want to know they have done something productive with their time. The players who still thrill when they get a little "ding! your level has gone up." These players value stability and a rewarded hope that the future will be better.
They are the middle class. These players are not the radicals, they are the ones who want a reliable world where as long as they put in hard work the way they are told to, rewards will come slowly but surely. They do not think (like a radical) "okay what do I really want from a game, and why can't I have it now?"
In a collapsing middle-class economy where responsibility and hard work by no means lead to professional success, can you imagine why such videogames would become increasingly popular to them?