I guess my answer is "of course not!" I can't imagine a campaign that did have characters going, "Sorry, first level fighter, I'm level three... and you're going down!"
In fact, I rarely even know the relative power levels of my opponents. For example, when I play in my prequel-era Star Wars game, and my fifth-level hero has to choose betwen fighting against Asajj Ventress or a bunch of droidekas, I couldn't tell you who he'd rather fight. Or in D&D, I'll often be dealing with two humanoid villains working together, or a humanoid and a monster... it's often unclear which is more of a threat. When characters have in-game rankings, they're often misleading... the court jester (not that I've ever run an adventure involving a court jester) might be the highest-level character in the castle.