Ok, i see the miscommunication, i think. I understand that you don't want to do away with the whole system. But change doesn't just mean replacing the whole shebang, agreed? That said, you aren't satisfied with the current state of affairs, correct?
Next, you pointed out another contradiction with you pointing out your advocacy of lower late game levels. What you suggest with the badges would go against this, as you would allow, emphasis on this, Allow players to grow faster, demanding the Npcs do the same, ergo higher late game levels.
Next, that "path of least resistance" may not be the case for some people, depending on how they play, like i said. They may DEMOLISH with a bulky team rather than the sweepers you employ, i know i certainly had an easy time with a team consisting of Torterra, quagsire, ampharos, gothitelle Ninetales and a noivern, most being more bulky than many of their counterparts but unable to solo gym leaders. FYI, that includes Noivern, he could not Solo samson without grinding, but he did one hell of a job at lvl 61.