How many folks got annoyed with Star Trek about how episodic it all was, how the characters didn't change, and everything was wrapped up in a bow at the end of the piece? While many of those inspirational stories are cool, I am not sure their overall story structure is what makes them cool, and may not be the part of them a DM of a long-running campaign wants to emulate.
Character development is a totally separate issue. Look at "Babylon 5," or "Battlestar Galactica," or "Supernatural." Plenty of character development, well-developed story arcs, but not much power gain over the course of the series. (Unless you count the Sam and Ruby subplot in season 4 of "Supernatural," but given how that ended... yeah.)
In fact, the only TV series I can think of offhand that does have dramatic power gains is "Buffy the Vampire Slayer." And even there, out of three main characters, the only one who really skyrockets up the power scale is Willow. Buffy and Xander are both appreciably stronger by the end than they were at the beginning, but it's incremental rather than transformative. I would characterize Xander as "chump to dude" and Buffy as "badass to more badass."
Characters gaining immense power is pretty much confined to one specific story type, the bildungsroman or coming-of-age story. The bildungsroman happens to be one of the most common tropes in fantasy, so it resonates with D&D players. But it's far from the only way to do things, and as the basis for an RPG I think it's overrated.
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