Most superheroes don't get markedly more powerful over time, so IMO it's a bit different. Some superhero video games do
I think sort-of-medieval works because it doesn't hit the uncanny valley issue. Have you ever seen The Polar Express? It was a okay movie that would have been better with either better fidelity or worse. As it was it was just strange to watch this animated movie that kind of looked real but not really. Kind of like how some people are fascinated with the Kardashians*. We know they aren't real, but they're so close it's spooky.
In any case, fantasy is close enough to myth and legends that have been around for a long time that it works for people without getting too caught up in the whole "it doesn't work that way" trap. Set something in the modern era and you'd have to continuously update it to keep current along with our knowledge of how things really work. That, and if set in the modern day some guy with a software development background is going to start going on about how you can't hack into a computer system by randomly mashing on a keyboard.
D&D doesn't do a very good job at simulation. Then again, our ideas of what it's trying to simulate are so vague and mushy that it doesn't need to. If it were trying to simulate the real world we'd be hitting all sorts of "but it doesn't work that way". As it is? We can have longbows that use dex alone and survive being eaten by a purple worm and it's okay because it's just fantasy and nobody expects it to be too realistic.
*I'm not one of them, I only have a vague idea of who they are because it's impossible to not have a vague idea of who they are.
Most superheroes don't get markedly more powerful over time, so IMO it's a bit different. Some superhero video games do have PCs "level up".
Lego video games are the best RPG styled games with your PC, essentially, staying at level zero throughout the game, unless you unlock other NPC's to help achieve goals and secrets with an ability to unlock the barrier or object, needed to raise your health or unlock a new ability to progress further into the game.
I mention Lego video games because they are very similar as a PC party in D&D, where you need other team mates to help achieve the adventure goal.