The Physical level system isn't necessarily the reason attributes don't do much....
The don't do much because they were made to be that way
In the beginning, attributes were everything and they mattered, big time... increasing your VIT made a huge difference in how much damage you took... but DEF didn't do as much... and the problem was there were conjurers pumping VIT and taking less damage from physical attacks than gladiators... so in one pf the Pre-Yoshi P patches, attributes got a MAJOR nerf.... we logged on and all of a sudden had like 300 less HP and were getting hit like trucks.....
So no... the physical level system doesn't inherently make attributes suck... its the coding.....