The Power Curve is a measure of how the power of a character changes as he levels. Usually in RPGs, characters start off weak, barely able to best a rat, and end up crushing dragons with a single hit.
The Power Curve is a way to describe how great this change is. A steep Power Curve will see end-game characters massively powerful compared to starting characters. A shallow Power Curve sees end-game characters more equal to the starting characters.
Found and copied from rgrd, the following message by David Damerell brings up some interesting points regarding epic fantasy, and the reasoning behind the DnD power curve:
Let’s be clear here; even a 20th level warrior cannot take a catapult shot to the chest. It’s just that, as long as he has hitpoints left, you’ll never hit him with a catapult. The mechanic’s a “hit” that does “damage”, but what happens in the game world is that he barely escapes it, gets scratched up by debris, tires, pulls muscles…
50th level, of course, is well into epic levels; if you do play up to that level, your characters are demigods, and shouldn’t be thought of in human terms.
As for the hordes of grunts, Miyamoto Musashi tackles a couple of dozen guys in Yoshikawa’s novelisation, and that’s not even epic fantasy; consider the Amber books. No-one would dispute that Benedict could fight a hundred or a thousand ordinary men and win; it’s appropriate to the genre.
[But, generally speaking, your umpteenth level characters shouldn’t be fighting hordes of no-challenge beasties. There needs to be a sense that your old opponents are still out there and now no match for you, to get a sense of progression and growth - another mistake that MMO*s are prone to is that being a 2nd level character fighting 1st level beasties is not very different to being a 50th level character fighting 49th level beasties. City of Heroes is especially bad here, because the power system tends to mean your character will have essentially the same combat abilities at 10th level as at 21st.]
But you can’t do epic fantasy with GURPS, not without a set of patches that make it akin to D&D, because it does have a “realistic” treatment of combat and injury. Sir Lancelot might be killed by Mordred or by a giant, but he’s never going to be brought down by a random arrow. This is the old “realism” fallacy; the mechanics want to be appropriate to the genre. If you don’t like the genre, that’s fine, but don’t blame the mechanics for doing their job.