Although my game runs off of an AD&D foundation, I've adopted a 12 level scheme myself. While I used to run, and enjoy, high level D&D I find that I don't play enough to get to those levels anymore. Having a scheme of 12 levels plus bennies has become more useful for me.Because leveling in D&D is the current method for improvement, it is essential unless you replace it with a different method. There are games as you mention were improvement is based on purchasing better abilities via XP or karma or whatever, others have you roll for improvement if you accomplish something significant, etc.
I've developed an L12 variant, based on the E6 idea, but stopping at level 12 and 6th level spells. It is, for many, the peak of heroic before you are really getting into super heroic.
As to leveling in general, I feel that it is necessary for a D&D game, particularly in a class based system. If there wasn't any leveling, or one or two levels at most, I would be surprised if it wasn't a planned short campaign. Maybe 5-6 sessions. Otherwise I would expect there to be relatively quick levelling at first, slowing down at 5th, crawling at 9th.