Said Gez:
Gez, this proves that you're the coolest gnome in all France.
That aside, in my campaign the elves don't live quite as long as PH elves, but they're still the longest lived PC race. Why aren't they all high level? Well, their rulers are pretty high level, but the average elf isn't.. they're just not very vital. After having lost their empire, they've become insular and withdrawn, spending much time in bitterness over their reduced stature in the world.
Well, that's the normal elves, the elves everyone knows about.
The other elves, the ones that aren't lost in self-pity, they're a highly spiritual and mystical subrace -- they don't care about power and all that, your average Bright Lander elf is content to ply his fishing net or throw his clay in peace and serenity. Low population with them.
Therefore, with both groups, you get a small set of powerful types, and a bunch of not-powerful types. As for the PH elves, well.. I think Psion hit the nail on the head -- sure, they have a long time to do stuff, but how heroic are most people? I constantly see mentions of how elves make all this supremely high-quality equipment and what-not because they're willing, even eager, to spend
ten years to make one bow. Or carving or necklace or whatever. That's going to give you a lot less time to be slaughtering orcs, skewering dragons, and negotiating cease-fires between warring nations, and hence, less experience. Spending ten years making something isn't very challenging when you're already a member of a race that's supposed to be that patient, so the elf craftsman would earn experience at about the same rate as a human craftsman.
Even the elven favored class, wizard, is a class that encourages a sedentary lifestyle, doing research and penning scrolls.