So a couple of people pointed out some issues: How would a legendary archer fare in a contest with a lower level one? Ascending bonuses provide a feeling of advancement, what about that?
So a couple of ways to address that. One is to reintroduce say a +1 per 5 levels skill/inherent bonus that represents that. I would make it overlap but not stack with magic items and this also would help to balance out the inevitable impact of magic items on the game. I've always felt that the bonus a magic item provides to hit represents the item guiding the hand of a lesser user, whereas a veteran warrior wouldn't need such assistance. That does reintroduce an ascending bonus, but at a far reduced rate.
I think the idea has merit, but I want to look at the math a bit closer.
So:
To hit: +1/5 levels
Defenses: +1/5 levels
Hit points: +x / level
Damage: +y / level
I think this is viable, but there are some areas where abuse could come in. First off is feats. Feats should never never never give an unconditional bonus and even conditional bonuses should be rare. Game designers have an itchy little trigger finger when it comes to bonuses via feats that they would need to control. Ditto for racial abilities. Class abilities should probably have small bonuses, but the moment you make it feat plus race plus class (plus item/inherent) plus powers plus plus plus it gets out of hand.
Assuming a base 50% chance to hit (as a starting point for discussion) and assuming the +1/5 doesn't kick in until level 6/11/16/21/26 (because I think that +6 in a D20 system is way too large, even for a high Epic PC), this means that the 26th level PC has a 75% chance to hit and his 5th level foe has a 25% chance to hit back.
Now, damage and hit points become the issue. Let's assume for the sake of discussion that we are talking 3 hit points per level for hit points (to more or less follow a 3 hits to wipe out a same level foe model or 3 times as many hit points as increased damage). The 1st level PC has 20 hit points, the 5th level PC has 32 hit points, and the 26th level PC has 95 hit points.
For damage, let's assume the first level PC does 8 points of damage (3- hits to wipe out a same level foe) and that each level adds 1 point of damage. The 5th level PC does 12 points of damage and the 26th level PC does 33 points of damage.
To hit: +1/5 levels
Defenses: +1/5 levels
Hit points: +3 / level
Damage: +1 / level
The 26th level PC does 33 points of damage, so he wipes out a 32 hit point 5th level NPC on every swing (ignoring for the moment the fact that it might be a 29 to 37 point damage range). In 20 rounds, he kills 15 5th level foes. In that same 20 rounds at one foe attacking per round, his 5th level foes hit him 5 times for 12 points or a total of 60 points.
In earlier editions of the game system, these 5th level foes all needed to roll a 20 to hit this 26th level PC which means a single shot out of 20 hit. The 26th level PC would have taken a single scratch and not be almost 2/3rds damaged.
If one ups the hit points and hence the damage (in order to stay in the 3- hits to take out a same level foe model), the 26th level PC will be even more damaged percentage-wise.
So although I think the idea has merit and should have some serious investigation by WotC as an option, I do think that ideas that sound good on the surface do not necessarily result in game mechanics that work in practice.
Your original idea (without the +1 per 5 levels modifier) would have been even "less heroic" for the 26th level PC where the 5th level NPCs would be hitting 50% of the time and killing him in 16 rounds (~3 rounds if 5 foes were on him each round).
If one decreases the extra damage per level, then one also needs to decrease the number of hit points per level, otherwise it takes 3 hits to kill a same level foe at first level, but a lot more than 3 hits to kill a same level foe at 30th level. This is also known as grind.
If one increases the extra damage per level, then one also needs to increase the number of hit points per level, otherwise it takes 3 hits to kill a same level foe at first level, but only 1 or 2 hits to kill a same level foe at 30th level. This is also known as swinginess.
All in all, I'm not quite convinced that someone can get the math to work, but I'm willing to consider that I could be mistaken. I do think that Epic level Avatar God-like beings shouldn't necessarily be wiped out in 5 rounds if the DM sends a steady stream of 6 NPCs 21 levels lower at him every single round (where he won't be able to kill more than one of them back each round shy of special powers), but then again, I might be biased as to what I think the power level of a 26th level PC should be based on earlier versions of D&D.