Think about LotR. Middle Earth is dramatically different by the end of the series. Sauron is gone, the elves leave, magic is going away. This is a setting that is very, very different than what it was at the start. Compare, say, Conan. By the end of the Conan stories, Conan goes off into the sunset and Hyboria is largely the same as it was before he came in. Nothing really changes. Life goes on.
This is one of the hallmark differences between S&S and Epic Fantasy.
So, I do disagree with the idea that this shouldn't be tied to level. Sure, your 5th level character could be king, but, Emperor? How long would he actually survive in that position? And, lets face it, every setting book out there pegs the movers and shakers of the setting at pretty high level. Could you imagine the head of The Harpers as a 3rd level bard? The Grand High Poobah of the Zhentarim as a 5th level wizard? A member of the Circle of Eight as a 6th level sorcerer?
I don't quite follow the logic of the argument. If anything, the comparison between Conan and LotR points to two different ways of storytelling, S&S vs. Epic Fantasy, and does not in any way relate to the perceived level of the protagonists. Remember the whole point of E6 began with the premise that Gandalf was a lvl 5 wizard. This didn't keep him from having an impact on the setting. Conan would be of a much higher level than Frodo or Sam. The only reason he doesn't impact the setting is... because of the setting and the story.
Having an impact on the setting has nothing intrinsically to do with levels, but it depends entirely on the playstyle - so I don't want it to be "hard-coded" into the game.