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Those with crazy levels almost always appear to have crazy hours played.
Then there are also practical benefits of having a higher level.
1. You can add more friends.
2. You have more showcase space
3. Your profile looks more legit and pleasing.
4. Your booster drop eligibility increases.
The problem is some people just don't know how to make use of high levels. I've seen people with over 100 with worse looking profiles.
I think level 10 is minimum. Level 20 is recommended. After that it depends if you need more Showcases or friends slots.
I have made full use of my levels. I may have use for another 10 levels for one more showcase but after that Steam has to come up with something new to make me go higher.
Too many showcases don't look good in the current layout.
Level 10 is minimum if you care about adding friends or showing off your free time and disposable income. Most people don't care about that, they just want to game.