I don't think the problem is with the fantasy genre as it is with the leveling paradigm.
The fundamental conceit of (combat) rpgs is that:
As I do stuff, I become harder to defeat.
In fantasy games, you have all sorts of explanations for this, from magical healing, to better armor, to better skill with weapons, to just being physically tougher than the other guy. Levelling up represents becoming tougher and better skilled. In a swordfight, we expect the more skilled fighter to come out alive. And a lot of the attraction of RPGs relies on this: our working on a character and slowly making them more and more powerful.
However, as you introduce technology, it becomes a lot harder to justify this basic idea. The entire point of technology, in a lot of ways, is to replace skill. There is an old saying, popular in the eighteenth century, that "God made all men, but Sam Colt made them equal." This saying perfectly encapsulates the point that technology makes the unskilled deadlier. Non-fantasy games need to be able to account for this. If you have a game where a character can get shot with a gun at point-blank range and almost always survive, that's really hard to take.
The fundamental conceit of (combat) rpgs is that:
As I do stuff, I become harder to defeat.
In fantasy games, you have all sorts of explanations for this, from magical healing, to better armor, to better skill with weapons, to just being physically tougher than the other guy. Levelling up represents becoming tougher and better skilled. In a swordfight, we expect the more skilled fighter to come out alive. And a lot of the attraction of RPGs relies on this: our working on a character and slowly making them more and more powerful.
However, as you introduce technology, it becomes a lot harder to justify this basic idea. The entire point of technology, in a lot of ways, is to replace skill. There is an old saying, popular in the eighteenth century, that "God made all men, but Sam Colt made them equal." This saying perfectly encapsulates the point that technology makes the unskilled deadlier. Non-fantasy games need to be able to account for this. If you have a game where a character can get shot with a gun at point-blank range and almost always survive, that's really hard to take.