I noticed this exact same effect leveling GLD 1-10. I did it all in pretty much the same gear; starter sword, mostly starter clothes, a couple minor upgrades like L5 boots, L4 gloves, a couple rings. I always repaired my gear very shortly after seeing the first damage warning icon show up.
From whenever I started paying attention, ~1-3 up to 10, I saw my HP steadily decrease from ~980 to 700 once I dinged 10, and I similarly saw the damage I was doing per light strike drop from 90-100ish to ~50-60 over the same level range.
I suspect that final "effective" stats are a product of whatever byzantine formulas are coded in to the game to determine how total stat points available from assigned stat points + the product of gear optimal rank & class affinity vs. character rank for any given class.
I guess the idea is that as each stat point counts for less as you rank up, players will be encouraged to upgrade gear appropriate for each class, as well as allocate stat points in a more and more specialized way for each job as they level up.
Spreading everything around until you have 40 points in every stat seems to work well enough if you're leveling tons (or every) job(s) to 10 or the low teens, but I suspect the game has been set up to increasingly gimp this behavior as levels increase, forcing you to stack core stats like STR/VIT for heavy armor classes or MND/INT/PIE for casters.
This also forces you wait through the point reallocation cooldowns to make major job shifts, which is not so fun. :(
Edited, Nov 18th 2010 1:47pm by KurisimasDay