From the perspective of someone who's been doing this for a long time?It is not easy to run a game in which characters of every level feel valuable, but it has been done. I've seen it many times, and I know others here have seen it too. From what I've seen it requires a consistently high level of energy, creativity, empathy and skill, but it's necessary, because every game worth its weight in salt matures and eventually faces the same problem. The games that fail to effectively address this problem fade away. But I think it says something that some of the longest enduring LARPs in the US still appear to have significant power disparities among their players. Somehow they've found someway to attract enough people to sustain. I doubt it's because they divined the one true rule system, or because they've eradicated disparities.
More likely they somehow continue to care enough, provide enough energy, creativity, empathy and hard-earned skill to consistently put on a damn good show.
Hard resets are seductive but tricky. You might temporarily invigorate the game...or you might blow a hole in your player base and never recover your numbers. Drawing resources from within yourself and your organization to improve your running of the show is harder, but I've never seen it kill a game. Level caps and resets always seem to me to be a temporary fix.
Building a dynamic, interesting, inviting game that accommodates for all player levels and interests seems like a better long term goal.
It's more that new players keep showing up and cycling out while the long-termers stick around and keep getting more powerful. A lot of the 'big cards' I see in the midwest today, I played with in their first few events back in the early-mid 00's. There are still people kicking around who were fairly large cards when I started.