Limitations do mean limitations though, can we agree on that? I mean most RPG's of the past don't have open worlds, even those that where more open than others like the Fallout series for example still had a lot of limitations placed on them in regards to where you could go, what you could do and how you could do it.
Yes, but not all limitations are a bad things ; in fact, on the contrary, many limitations (not all) are actually what make a game interesting. The limitations provided by a non-scaled system are what make it feel more realistic/consistent/believable and increase the fun of and immersion.
I don't know of any limitation that the "static" system Fallout provided which actually would have been improved by level scaling.
The issue with level scaling in Skyrim is that when you level up you level up a generic level on which your scaling is based, but it does not take into account which perks you select and what gear you are wearing. Hence if you get to level 20 you might only have blacksmith skills, hence you are going to svck as a fighter and the game might be too hard, but on the oppossite end you might focus on combat and dealing damage and it might be too easy.
Hence I agree that level scaling is still in its infancy and requires considerable more thought than was put into Skyrim but as a concept its far better than static MMO like balancing that dictates to you at what level you can go where and do stuff. Its not a perfect system in Skyrim and can easily be broken, but its definitily a concept heading in the right direction.
I'm also not supporting the MMO way, which is to define arbitrary zones as being of "level X to Y", and then stuffing in creatures and stretch them to these levels (hence having gnolls lvl 40 because they are in the "lvl 40 zone" and drakes lvl 20 because they are in the "lvl 20 zone".
What I support is a "logical/sensical" world, where creatures have level corresponding to their logical strength (a dragon is a lot stronger than a giant which is a lot stronger than a wolf which is about the same strength as a wardog, etc.) and are found in their logical places (wolves are found in the wilderness, mountain lions, well, in mountains, boars in forests, bandits in ambush positions or in their stronghold, etc.). Just a world that feels logical, and hence is much more immersive.