Placing Lv3 cap is honestly impractical. the amount of gems and refining you would need to go past above Lv4 makes the precious two sockets you have in your equipment too valuable.
It also acts as agent to balance the outrageous UG prices we have, you shouldn't have to pay so much to get relatively better, if people feel the cap is necessary, but I don't think so, because logic tells us that anybody who forges above lv 4 is probably not after best player title, but rather economic-cost for enjoying this game.
In other words, I don't see why we have to cost so much gold for a player to be important role in any of mazes or dungeons.