It's not gotten rid of completely, it just makes sense now.
Certain instanced NPCs, like random raiders or animals, will be initialized appropriately to your level as soon as you enter the area, permanently. That means that if, say, you visit Minefield as a level 12 character, the random NPCs there will be assigned a level suitable for you to combat them, and every time you return to that area they will always be that level. You can come back as level 19 and all of the baddies around there will be easy as piss to kill.
Most key stuff, like instanced dungeons, territories, and factions, are all strictly leveled. There will be areas in the game where you simply can't go at first (downtown DC) because the NPCs there are extremely powerful.