Quote Originally Posted by Wolf Kanno

Your correct but doing that event also unlocks the optional dungeon and I felt people would understand it better if I said it that way. Course it is confusing since I said requiring the best loot was also a factor so I'm sorry for some confusion.
Well, to be more specific, it's actually saving at the final save point that unlocks both access to the bonus dungeon and the PA to remove the final boss's limiter (and if you did the first part to the PA earlier in the game). So if you were feeling suicidal, you could actually try fighting the "unlimited" final boss without the extra levels and best stuff from going through the bonus dungeon.

But yes, I agree, games should have more options to make the final boss a bit more challenging if you've already done optional content. Some more examples can be be found in some of the Tales games. (SPOILER)In Tales of Destiny remake for PS2, clearing the bonus dungeon gives the final boss new cheap super moves to counter some of your own skills. In Tales of Vesperia, doing a sidequest gives the final boss a third, more powerful form. And maybe more in others I haven't played

As for Sephiroth, even using Knights of the Round to make him more powerful, he isn't too intimidating, especially if your characters were prepared to fight the Weapons and the like. Perhaps if he got some new skills or a more threatening AI pattern, he could be more challenging.