I keep reading about players capping their characters at certain levels, I have to ask, why is that?
The short answer is that you can easily get as powerful as you possibly ever can in the game by 30, and there is absolutely nothing new or available after 30 except that your foes just keep gaining hitpoints.
I cap at 20 because there is nothing after that level that my character wants. Yet, all quests, almost all enemies and the gear that I want for my character is all available by 20. The difference between level 20 and 30 is a tiny numbe of new enemies, perfect amber/madness gear if you have SI and top leveled quest reward items; those who want that stuff often cap at 30.
Another approach to the question is to ask why would one want to level beyond 30? Oblivion is very different than most games in this manner. Higher level does not equal better or more powerful compared to your foes, since they level as well.