If characters weren't balanced by level, you'd have a point. But an elf who adventures with his human friends is too powerful to adventure with his children. Campaigns are still measured in human generations, not elven ones.
Someone above (sorry, can't remember who) the notion of an elf born on Earth in the Middle Ages could live to the millennium. Think of all the things that elf would have seen. The plague, the Renaissance, the Age of Exploration, the Enlightenment, the Industrial Revolution, the World Wars, the Space race, and the digital age. The idea of one person seeing all the history first hand is mind boggling. Even a young elf has a human lifetime worth of time to master all manner of skills and learning. The idea that a 120 year old elf and a 20 year old human have the same levels, skills and abilities should be farcical! What, did the elf sleep though class for 90 years?!?
So while an elf may live 700 years, the game does nothing with that because it would fundamentally change the nature of the world in ways that would be unplayable.
Anyway, getting off topic. Just saying the idea that any species can be more than a funny costume is aspirational, but not practical.