The level cap may or may not be permanent. The issue that was run into was that we'd have incredibly incredibly incredibly high level NPCs out there, that were just leveled by walking.
The original idea was that there'd be XP caps based on level and action. Such as, you could get walking/combat/mining/etc xp until level 4, combat/mining/etc until 8, combat/etc untl 10, and combat until x. Basically a way to ensure a risk/reward, since otherwise we find players (whom in our universe are meant to be the Heroes/awesomenes) are vastly outstatted by an NPC.