And a thousand of those .1%'ers will try a second time, and the .1% that succeed that time will be hailed as geniuses and people will set about copying their open plan offices and terrible management styles in the hopes of replicating their success.
But I've played some games. I am 137% confident that some form of "level up" (roguelikes, MMOs, MOBAs, FTL) is an extremely strong addiction factor. League of Legends, that free game whose net worth is among the highest of all time.
In real life, you study->grades->job->promote->takeoverworld. Or liftweights->liftmoreweights->liftmoreweights. Or climbmountain->climbhighermountain...
In games, you do that in 1/100 the time and effort. Tap a few buttons and "you win!!!!"
A sweeping statement to the effect of "people don't understand addiction" is basically malicious and I accuse you of being the inventor of gamification or one of their PR folk.
Try playing more unsuccessful games. You'll find that most boring, unaddictive, terrible games that you'll never play more than once have the same leveling up mechanic.
Nothing is binary; I'm not going to say "either leveling helps a game all the time or it doesn't". Sometimes leveling-up mechanics help a game, sometimes it doesn't, sometimes it alienates one set of users and attracts another, and there's no magic formula for when it helps and when it doesn't, and the nature of the leveling-up mechanic itself and how fun that is can vary in effectiveness dramatically. It's like having the user's avatar wear a funny hat.
There is just something about the "Skinner box"-style of frequent microrewards in games that scratches an itch in the human psyche.
Well before then players of the original Diablo were obsessively clicking cows because of rumors and belief that there had to be something to the cow.
Nobody fell down the stairs and discovered that the tumble accidentally linked their KPIs to engagement metrics.