I must say that I like this proposal more than anything I've read in this thread yet. I just don't see the point of more than 10 levels. It's a scalability thing; sure there is gonna be some level bloat soon, but tack on another 10 levels, and there's gonna be more level bloat in ~6m-1y. I think you're just mitigating the problem rather than solving it.
On that note, is it a problem that we have level bloat? It just goes to prove that we have people that are either a) long timers, indicating a stable community, or b) intelligent, indicating a good community. I think it's both, IMNSHO.
This idea is cool. ++epoptai