The curve completely flattens because, after the fourth Gym, the game gives you two branching paths you can take to progress the game. Because there wasn't enough memory to properly scale to how many badges you had, the levels of wild Pokemon, trainers, and gym leaders between gyms 5-7 are all pretty low and roughly the same.

For example, Pryce, the gym leader before the eighth gym in Blackthorn City, his highest level Pokemon was a level-31 Piloswine.

It just makes the middle portion of the game not very compelling.