Don't think of level limits as a curse upon the non-humans, they are a blessing.
Level limits aren't a game balancing act (Ick! This thing called "game balance", it is an evil thing).
Level limits aren't a force to encourage the play of human characters.
Level limits aren't a re-creation of stereo-types.
Once a demi-human reaches the limit of its level(s), it's player is no longer constrained by the curse of thinking that, to conquer bigger and badder monsters, it must advance in hit points, spells and/or other special abilities. No, the player of such a character is blessed earlier on, than one of a human character, that the way to great success (land ownership, riches, monster-slaying heroism sung by bards, or whatever, take your pick) is through the brain of the player and not how many hit points, or how many lighting bolts the character can throw nor how many attacks per round are available.
Think. Think of the accomplishment of the mid-level dwarf, standing side-by-side with it's 14th level human companion, conquering every manner of devious trap, trick and foe brought on by the referee. Certainly, the dwarf's player learned of means to succeed w/o higher level hit points or abilities. The player found the means to succeed beyond what lay in any rulebook. Dem's braggin' rights, ya'll
Level limits are not a game balancing act, encouragement towards humans nor meant as a stereo-type. No, level limits are a gauntlet thrown down directly at the feet of player. On that gauntlet are written the words, "Oh yeah? How good a player are you, really?"
"A word to the wise ain't necessary -- it's the stupid ones that need the advice." - Bill Cosby