But I guess then the question is where are these higher levels supposed to go?
The XP penalty (If I'm remembering correctly) doesn't apply to the Village of Barovia, and if it does, the average level there is always so high that I've never run into it out there on my higher level PCs. That's a way you can stay in Barovia, and still keep from tangling too much with the areas/events designed for the new blood.
Dementlieu is
A) Near empty a lot of the time especially recently
and
B) Not for everyone; not everyone wants to do the political thing, a lot of people -like- the natural horror and fear of the night that Barovia offers
People get this strange misconception that Dementlieu is just 100% hands-off political landscape and no real action to speak of. As far as the lore goes for Port-a-Lucine, it's got a thriving underworld and PLENTY of opportunities for RP outside of the typical house struggle/politics you see. Also, nothing says "Fear of the Night" like greataxe-wielding Caliban Gangleaders walking down the same streets that the Gendarme patrol during the daytime. That place takes on a whole different feel once the sun goes down. But if the city isn't your thing, there's still the town of Edrigan nearby, outfitted with it's own dangers, and a much more rural feel.
As for things being empty, that's definitely going to happen. People tend to flock to where DMs are running events, or where other player groups are doing cool things. If you want to bring life to an area it's entirely possible, but you have to accept that at first things are going to be slow. You'll be bored and might spend a lot of time on your own, but things WILL improve if you just stick with it and never hold back on the creativity. (Maybe do things on the forums to promote the area, like posting cool screenshots or writing compelling Bio entries about the goings-on of the area) When you come across someone, try to make every encounter something that people will look back on and go "Hey, I really liked that. I think I'll go out there more often and try to find that person again". It will also help your morale (and sanity) if you grab a few friends and drag them along on your bold new journey. Nothing makes suffering easier than suffering with a few of your friends.
As far as level caps, that's never going to change. It's another thing that's been hashed out 100 times, and it's just not going anywhere. Besides, if you lower the cap to 15, then 15 will be the new stigma. If you lower it to 10, then all the level 5's are going to be muscled out. Don't get too caught up in the numbers themselves, but rather the unfairness of a few people being much more powerful than others in a given area and not having the respect for fellow players/DMs to bow out and allow the newer players a chance to shine. And while you may think "But I don't do that!", just keep in mind that these things are put in place because it's been observed for years that MOST of the higher levels in that area tend to disrupt things. Not all, but most.
If there's one thing I can say about the team, it's that they are very methodical in how they research for changes like this. If you go back in the thread, you'll see that Soren really did his homework and ran the numbers before implementing this change, and after looking at the data for yourself you have to agree that there was a problem. Nobody is trying to ruin anyone's good time, it's just that there was a problem, and sometimes the solution can't be something easy that everyone agrees with. Still, it was needed, and I've seen a large positive change since it was implemented. Besides, there's nothing saying you CAN'T go into Vallaki as a higher level. It's just that you shouldn't expect to get XP for being in a place that presents little to no challenge for your skills.