For the sake of maintaining some form of power gain via the grind that is the foundation in most MMOs, there has to be some sort of number gap. To keep things fair, that being said, there needs to be a system in place to ensure that this power generated from the number gap isn’t abused. By that I mean that we need to prevent griefing newer players, or players who simply cannot play as often for whatever reason, such that their will to continue playing remains. There are a number of ways to do that… the two most successful ways have been with damage scaling and with segmented level brackets.
EQ2 did this flawlessly, in my opinion. They implemented level brackets in every zone in the game - say you were level 24 and the bracket for whatever zone you were in was +/-8… the highest level character that you could attack (unless they attacked you first) would be a level 16, and the highest level player that could attack you (without you attacking them first) would be a level 32.
This, in conjunction with their fame and title progression system, prevented higher level players from griefing newer/lower level players. The fame and title system they had prevented you from getting any rewards at all from killing a player that wasn’t within 1 rank of your own. That’s a whole separate conversation to be had, though, and is actually one of the biggest reasons that EQ2 pvp survived as long as it did.
Scaling, which is the route that NW took (and did very well with), basically evens out the play field as much as is reasonable between your example of a level 20 and a level 60. The level 60 still has access to an extreme advantage in the number of perks they have, which will also be stronger due to higher GS, on their equipment, they have more stat threshold bonuses, and their weapon mastery will also likely be much higher and provide more to their kit. So, the advantage is certainly still there for the level 60… that being said, the action combat system still allows for massive outplay potential, and the level 20 can still win. This style of gameplay rewards avoiding taking damage much more than hitting your attacks or abilities. Is the chance high? Not by any means - but it is still possible. Is it possible to 1vX? Very. But, you have to play extremely well, and manage everything well (consumables, stamina, cooldowns). It isn’t as extreme as a level 20 besting a level 60, but I’ve won quite a few uneven fights - I was 48 and killed a 60, and as a 50 I killed a 51 and 58 in a 1v2 while doing pvp missions in Restless Shores.
I don’t think that PvP will always fail because of the inherent design of MMOs - I think it will always fail because people complain too much about a system that isn’t actually broken, and because too many people enjoy the power trip they get from “exerting their dominance” on the lower level players, for a near-guaranteed win. They need to feel like they’re good, feed their ego, etc… for whatever reason. That’s the main reason pvp will fail in MMOs. People know they get an advantage over others by playing more and leveling more, then abuse that power/number gap because that makes them feel good.