[quote=@BrokenPromise]

As for talking about limitations in a broad sense, I feel all limitations should be judged based on how well they are implimented. Rules are nothing more than limitations. You cannot have a game without limitations. But it's how the limitations are set up that determines how benificial or hindering they are.

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That's exactly what I did with my first four examinations—judge specific types of limitations.

[quote=@BrokenPromise]
As a GM, something that we look for is a balance among all the characters. Strengths that enable them to overcome certain obstacles, and weaknesses that we can exploit for interesting encounters. When you have a character that is good at doing everything, it is difficult to give other characters time to shine or make a challenge that they can solve in an interesting way. It throws the power scale of the RP off, where things are always easy for the strongest characters, while their challenges are so above and beyond the rest of the players that they can't even participate. This is not to say every character needs to be perfectly balanced. But such large gaps in power and utility can discourage people with more focused kits that aren't as strong. This is why I said it would be more interesting to watch Jade solve problems than Spectre. Jade has to use her Crystal growing powers in many different ways, while Spectre has three Aeons to choose from. But looking at the characters already in the RP, I would have to say Jade and Spectre have too much raw power and utility to be accepted.
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Let's talk about limitations on power levels, then; that's not something I touched upon in my examinations.

I'd first like to touch upon the idea that strong characters have easier challenges than weaker characters, and therefore weaker characters are pushed out of and away from a situation that challenges a strong character. I can provide multiple counterexamples from my own experience—examples where a challenge was meaningful both to a strong character and a weak character, challenges where a weak character did better than a strong character, and situations where characters with different levels of power both experienced interesting challenges. Even still, I'm wary of using the terms "strong" and "weak" as if power were on a sliding scale. If it really mattered that way, then skill would be moot and level power would be everything. "Power is more than just strong vs. weak; it's about the things you can handle and the things you struggle against."

For example, in my ultimate conception of Spectre, he's a being of pure crystal. His facets are shaped to geometrical perfection and he takes great care to keep himself that way—because, if his facets are deformed his magical reserves are drastically reduced and he is forced to draw power from others to repair himself. That one weakness changes the way he fights completely and opens up a whole host of challenges. Yeah, he can do a lot, and he's pretty powerful, but that doesn't mean he doesn't struggle or have things easy.

That said, you raise an important point about why the power limitation can be meaningful. As a GM, you say, it's a challenge of its own to generate interesting challenges for characters both "strong" and weak" without making one character's challenge meaningless in the face of the other's. And I completely agree. A sole writer who wants some of his characters to be very powerful while other characters are not as powerful must have a lot of skill in order to pull that off. For a GM, who isn't in control of every character? It's even harder. Not only that, but in a roleplay, all the players need to be skilled, too, in order to generate characters that are powerful but able to be challenged. But I've seen that happen very successfully, and when it does, it's entirely worth it and extremely satisfying.

In conclusion, if everybody involved in a creative work is in possession of the skill and experience to manage huge levels of power, I believe that a limitation on power is detrimental and stifling. This applies if there is one writer or many. If, however, some of the writers are unskilled at handling theoretically unlimited levels of power, power limits may help manage the RP or story. If you'd like an example (and not my own) of a creative work in which characters had huge differences between their abilities and powers and yet all had itneresting challenges and important uses, such that none of them were useless and everybody was important, I'll give you the best one of all—Avatar: The Last Airbender.