As far as applying logic to fantasy worlds: I think you can apply story logic, but trying to use real world logic to the mechanics of how a D&D world functions is always going to be severely limited because D&D allows for such vastly different parameters. This is a game that presupposes vast numbers of spells, magic items, sentient species, actively involved deities, ridiculous amounts of wealth. If those things were real, the result would not look remotely like a Renaissance Faire but with magic on the side.
The best stories use real world logic to come up with ways to make this work. However, you are correct, none if it usually looks like DnD is presented.
How would the Middle Ages have looked if there was ONE other distinct sentient species, let alone hundreds? Would cities have looked anything similar in a world where many of those creatures can fly or burrow, or outright teleport? What does the hydrological cycle look like in this world full of magic, or the food web, etc.?
These are great questions I love exploring. But here we run into a problem.
No, our games are literally "I describe the world (sometimes the players contribute), players decide what to do about it." The players assume that the story, including challenges, will make narrative sense; if they saw 50 soldiers and ran straight at them, this would probably not be smart.
This has never been a problem. I've been playing for more than 40 years and player choice is my priority; I run very sandbox-style campaigns. I honestly am not following your objection.
Edit: I don't really care about levels - I don't think of the characters in terms of their levels in anything but a very broad sense, as in: beginner adventurers, experienced adventurers, epic adventurers. Only in the latter category would they be particularly notable in the world. To me levels are mostly about the characters getting new spells and abilities to play with, not their status in the world.
As Stalker0 mentioned, it ends up mattering. For example, you say charging 50 soldiers isn't smart? But at 7th level, I may have access to Wall of Fire, and if the soldiers are normal guards with 11 hp... I might be able to rip apart that encounter with five PCs if even two of them are casters. So... are normal soldiers 11 hp guards or something else? What makes sense for the world?
You say you don't think about levels as status, just what the PCs can do... but that is exactly the thing that we are saying gives them status. If you are the only person in a religion spanning hundreds of thousands of people who can raise the dead... well, not to put too fine a point on it, but you are literally Jesus whether you are the second coming or not depends on if someone existed in the religion like that before. We have people in the real world who only fool others into thinking they can cure diseases with faith, and they have literal cult followings. Someone who can ACTUALLY raise the dead? The mind boggles.
Or, let us think of this in terms of the warlock or wizard. If you can single-handedly wipe out all of the soldiers in a noble's compound, or worse yet, just destroy the compound without even needing to fight them... then that noble is going to either very quickly be dead, or swear fealty to you, because while they are "the state" their authority in part comes from being strong enough to back up their authority. This comes up a lot in discussions about alternative superhero settings. If you have someone with the strength of superman and the mindset of "do the right thing"... they effectively rule the world. Just de facto, they are in charge. Because there is no force on the planet that can constrain them, and their own morals will have them breaking any laws they disagree with... with no consequences. And things they say they want to happen will happen... because the only way they don't happen is if they don't care.
At some point in the levels 1 to 20, PCs become a superpower. They contain, in themselves, so much hard and soft power that they are effectively nations in and of themselves. This has to happen, because at the end of the scale, they are fighting beings with the power to rule entire planes of existence. If you can dethrone Graz'zt and muzzle Yeenoghu, then Good King John can't do anything to you. The question is.... where on the scale does this start to happen. And if you decide it is something like level 7 where you have the strength of nations, well, then how do you have organizations with members who can challenge you? Because those organizations full of those members are already stronger than the countries they are threatening... which means they should already be ruling.
And sure, you can ignore this, but at a certain point you have to ask how a normal nation even exists if you've fought a dozen things this week that could destroy it if they only got close enough. Because... you weren't fighting these things in the years you grew up, so what happened?
