I've done it a few times just for the hell of it, though I never really went to extremes with it. I tried to avoid levelling as much as possible and tried to keep the most stat raising equipment on me when I did level up, but I didn't reset every time I accidentally levelled without the best equipment or anything. It can make quite a bit of difference in your endgame stats. And no, there is no reason anybody should ever need that to beat the game or the optional bosses. It's purely a masturbatory exercise.