Here is a great NPR podcast on it. But basically they tried it in California, people liked it, TurboTax didn’t and lobbied against it. They sent you how much you owed and you could verify it, confirm, and send it back super simple.
https://www.npr.org/sections/money/2019/04/03/709656642/episode-760-tax-hero
I agree with you but the silliness of the leveling system did have its own charm. As a kid I spent so much time jumping around and putting points into getting those athletics skills high enough that it became a bit game breaking.
There’s a certainly a balance somewhere in there but I don’t think the game was ever difficult enough, playing on medium difficulty, to feel like you’ve fallen too far behind the curve. For context I’m thinking mostly about oblivion.
I probably played through oblivion more times making builds that weren’t optimal and had weird stats than I did trying to min/max my attributes. I think, for me, leaving room for that kind of gameplay is part of what made the older games so special.