I can kill 50 bats and get fire bats, and kill 50 firebats to get even badder fireball shooting bats. But wait a sec, killing bats doesn't get me loot. Killing bats doesn't get me xp. And the more I kill them, the tougher they get, and the tougher they get the longer it will take me to reach my goal (killing the overlord).
See, I genuinely disagree that this is a problem. Perhaps to be more descriptive, I see why you might not like it that way, but I strongly disagree with the implied solution.
I don't believe in enemies dropping loot, granting xp, or generally giving a direct reward for killing them. Many games have had this mechanic, and some of those games are my favorite games, but still I never liked this mechanic and every often I dislike it in games that I like. There are a few cases where I thought it was justified, but I don't see that here.
When you make enemies give you something useful then they become self-contained challenges with reward in themselves. This might sound nice, but the problem with this is that this actively punishes you for not fighting them and runs on the assumption that fighting them should be essential. This is a very narrow assumption that doesn't work when it makes sense for combat to be avoided or averted in any way.
Wind Shelter missions, Stealth Assasination, NPC rescue, and other such missions don't explicitly encourage direct combat, and that I believe would be somewhat harmed by a mechanic that directly rewards the killing of enemies.
Same exact thing with the tier system. Suddenly all the monsters I've been fighting got tougher. Not only tougher, but with each tier they get stronger faster than your best spells can keep up.
Think back to an old game, say, dragon warrior for NES. You're near the starter town fighting slimes. You gain a few levels, use the gold you obtained to get better gear. You feel pretty good about yourself, ready to take on bigger challenges. But wait, as soon as you step out of town, the same slimes you've been killing left and right are suddenly kicking your butt! You can use pretty words to dress up the game mechanic in this game, but fundamentally it makes as much sense as my example, and just as satisfying.
The average computer game goes like this: You overcome challenge, get rewarded with better equipment, levels, xp and whatnot, then you use that to overcome a bigger challenge and the cycle keeps repeating.
Again, here I see why you have a problem with how it works, but I STRONGLY disagree with your implied solution to the problem.
In this case I prefer the way it works now over the more typical system you describe. I like that my enemy becomes more powerful because it forces me to make decisions about how I want to keep up. It motivates me to do things to mitigate it (such as building wind shelters) and makes me more careful about which missions I take on before raising continent tier.
I like that the monsters sometimes get stronger faster than my spells can keep up, because to me that's the game punishing me for my bad decisions. When I make bad decisions and don't think ahead I want the game to punish me for it.
I'm not saying you're wrong, you've pointed out things you probably genuinely don't like. What I am saying is that I disagree with you because some of the implied "fixes" to the "problems" you describe in some ways go against what I want out of the game.
Applying the implied "fixes" would make the game better for you, but it wouldn't make the game better for me.