By that system, Middle Plane residents, regardless of the strength and virtue of their character, would stand no chance against anyone from Heaven or Hell on the sole basis that the latter was granted and assigned a higher power number, which completely defeats the purpose of RPing and storytelling in general.
That's how it should be. No regular Middle Plane resident can defeat someone from a Higher Plane. However...
For instance, the noblest and greatest hero on the Middle Plane you might evaluate as 400-500 at the maximum, which means that he would be obliterated within minutes by a "god", which is completely unfair and strips bare and conclusively kills any possibility of the finite and the humane, leaving space for nothing but competing detached divinities.
If someone from the Middle Plane is truly destined to kill someone at "god" level, then this Middle Plane hero's true power level would not be 400-500. He would appear to be that much, but at the moment of truth when he comes face to face to his god-level nemesis, then one way or another the hero's power level would be raised to a level that surpasses his enemy's.
In my world, you can only defeat someone by being stronger than him/her. Power level is the only thing that matters. I understand that "love" or some other factor may enable the hero to defeat an antagonist much stronger than himself, but in fact "love" or some other factor gave the hero more power so that he would be stronger than his opponent.
Further, if you insist on maintaining these quantified power levels, then I will insist that they not be the sole, or even most important factor in determining the actual strength of the character.
As I said above, power level is not as absolute as you think. For example, love, hope, faith, empathy, and other positive emotions can raise one's power to a level that is utterly unreachable through normal means. You have seen the classic line of "I must beat him because everyone is counting on me", right? In that case, "hope" gave the hero enough power to defeat the villain.
Unless Argerael, Archangel of Fate, has pronounced a doom that Hero A is destined to kill Villain A, Fate has no involvement in the encounter. Heroes who are not necessarily fated to kill a "god" or a Higher Plane being may still do so, and you underestimate the power of the residents of the Middle Plane. As if case in point, the example of Xanriel was needed to be brought forth here (though the Fallen Druid did not kill the Singer, he could have done so, had he chosen, and yet, the former was not fated to defeat the latter).
Since according to your paradigm, the power level is all that matters, I will explain things according to that view: if positive emotions and virtues significantly enhance the power level variable, then negative emotions and vices must have the opposite effect. Therefore, Catyrael's actual power is much stronger than a 750 in Regular Form, though his base power may be 750, and this is not to mention Solraegiel, the very embodiment of idealistic nobility, whom would have far surpassed 1000, whereas Bloodshadow, whom has demonstrated nothing but selfishness, egoism, and arrogance would be the weakest of the masters, as per Purity's post.