Overlevelling is always bad, except in the rare case where level does play a role. For example, in Diablo II, you HAVE to be level 20 before you can progress past the Ancients; or even in WoW, where the game STARTS at 60 and that the lower levels are just to give people a sense of accomplishment.
It robs the game of a challenge, as is what is usually intended of a game of the Single Player type. Now if this were an RTS game or FPS, the campaign or main plot is mostly just to get the person skilled enough to play against others. But an RPG by its very nature is plot oriented, and challenge conquering.
A real problem, isn't it? Refer to above.
As Ender, you have mentioned before, the main flaw of FFX is its strictness; linearity, and lack of a freedom of movement. Case in point, the demand of the game is such that one that over levelling causes one to gravitate toward a character whose abilities conquer all. For some, this is all physical DPS, and for some, all Magic.
Assuming you read the first part, if FFX is intended to be a challenge, then the challenge of the game is to play with all of the characters. Overlevelling in this case is bad, as even you have yourself said that people should use three characters, as opposed to seven. People ditch less "useful" characters for the ones that they prefer more. You can still hack away at enemies using "Attack," something I have found people will do at higher levels.