A thief goblin who you only bother with hide/move silently and sleight of hand is missing out on however many levels of Sneak Attack, making him possibly a more viable opponent.
A fighter who is "just hit points", misses out on at least 2 feats (at first level alone).
A Magic User who just has a few spells, but no concentration, spellcraft, etc, is basically a 1 or 2 trick trap before he's surrounded and unable to cast.
If you want your goblin to do more sneak attack damage, just give it bonus damage with combat advantage/flanking.
Give your spell-casting goblin a level +3 Concentration bonus.
Just give your monsters the numbers they need to wokr!
But the monsters really should follow the same rules as players. If the third-level orc has whirlwind attack, but you are playing an orc fighter at third level and you can't get whirlwind attack, that makes no damn sense and needs to die.
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if they are third level PCs and run into a third level wizard, they should have a pretty good idea of what it can do.
But what, in the fiction, does this even mean? When the PCs meet an orc warleader who can whirldwind attack (= close burst), how do they know he is 3rd level? What would it even mean for the PCs to know this, in the fiction?
Likewise if they meet a wizard. They might recognise his/her spells - but how woud they know his/her level?
I agree that one should not get too stuck on such things, but there is value in using the same mechanics for the same concept. If a caster-type monster plays by the same rules as a PC wizard, it provides two benefits:
1) It increases player understanding of the game world.
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2) It reduces the amount of rules that the DM has to learn.
To me, this is relevant only for monster magical abilities. (A whirlwind attacking orc, for example, is self-explanatory - the orc is a master warrior who can attack all his adjacent enemies.)
And even then, it is an argument not for giving monsters class levels, but for expressing their spells in the same mechanical terms as PC spells.
For example, it's a reason for a goblin hexer's Mirror Image to follow the same mechanical pattern as a PC's (but the hexer might still get more, or fewer, images without causing any confusion on the part of the players or the PCs - s/he has learned a weaker version, or is casting a better version, of the spell the 3rd level PC wizard knows).
It's an argument for a game similar to Runequest - monster abilities use the same mechanical "language" as PC abilities.
But in RQ monsters aren't
built as PCs.