It really depends. In open world games where there's a lot of freedom, it's basically a requirement, in some capacity (It can be implemented in many ways, though).
Like, imagine if Skyrim had no level scaling. So you finish the overlong intro at level 5 and go "Sweet! Time to hot-foot it over to Markarth, I wanna start there!" So you jog along the road, and suddenly a level 34 bandit fucks up your day in one hit.
"Fine" you say. "I wanted to join the theives guild anyway, might as well go to riften". And you manage to make it there with no incident and sneak through some of the first encounters in the Ratway. Then you turn the corner and a level 40 skeever jumps out and tears your whole face off in one hit.
So, after these incidents, you come to the conclusion that you have to go to Whiterun and start there doing the story quests and the first 2 or 3 Comapnions quests (before they get too hard), or maybe going to handle Solitude which is a level 20 area that you can JUUUUST handle if you use a lot of stealth and backstabs.
With the level scaling, you are free to go anywhere from the word go.
Now, that being said, the "Bandit in Daedric gear" scenario is dumb. Certain enemies SHOULD cap out at a certain point (in fact, you should be able to go "Hey, dipshit. I'm the goddamn Dohvahkin. I am WEARING a dragon. Are you SERIOUSLY mugging me?" at a high enough level and he just sheepishly goes "Oh...My mistake." and runs like hell), and new enemies should come in in the later game (like, foreign Daedric armor assassins, or elite hitmen from the Thalmor, etc).
That, or leveling shouldn't be about stats, it should just unlock more abilities, and enemy progression should be tied to your actions (kill a lot of bandits? They send out hitmen. Join the Empire? Now you have to fight Stormcloak patrols on the road. Do the Cihdna mine quest? Now you have to deal with either tough thugs from the Silver blood family or roaming Forsworn out to get you all over the map. That kind of thing)