I would have to say that you're being a /tad/ unfair to Mario & Luigi in terms of the final giant fight of Giant Dreamy Luigi vs Giant Dreamy Bowser. It's no where near the final fight - after all, there's still the final battle against Antasma and the final battle against Bowser.
That being said, the giant battles were absolutely shoe-horned in "because they were cool in the last game" and were not really that great.
In my opinion, a more important topic to take into consideration isn't the problem of your level ups being ignored, or underutilized, but the RPG elements being poorly implemented into the game:
One such example is, again as you said, games giving either pointless upgrades that don't do anything, or games that give you upgrades, just to strip them away at the climatic moment or for no reason for half of the game. At those points, the upgrades and levels mean nothing, do nothing, are nothing. But this is a small part of a bigger problem.
Going back to Mario and Luigi: Dream Team (And this is, in fact, an issue with all of the Mario and Luigi games) is the issue of a poorly balanced level up system. The difference between yourself at level 15 vs a level 15 boss, and yourself at level 18 vs a level 15 boss is ASTRONOMICAL. A fair fight turns into a one-sided curb-stomp battle that you can end within 2 or 3 turns. At this point, the RPG elements are meaningles, arbitrary, and absolutely useless. Your attack stats don't matter. Your defense doesn't matter. +5 attack at level 15? Cool. +10 attack at level 18 apparently results in dealing three times the damage...for some reason.
On the inverse side of the issue, we have games like Sonic Boom. You can level up Sonic and the gang all day, give them the runes that grant them shields, bigger splash attacks, more powerful throws...and yet nothing really changes about your characters. You're just as weak as you were at the start of the game, but the enemies slowly gain more and more health as the game progresses, resulting in massive grindiness in late-game combat (as if the combat wasn't already pure padding to begin with).
So I would have to say dropping the RPG elements is only a small part of a much, MUCH larger issue of simply mishandled RPG mechanics. It's a burning shrub in the middle of a forest fire.