A powerful king with many vassals can ultimately use these items with high allegiance rank requirements on them whereas they might not have the arcane lore for a similar item without the rank requirement. Turbine has made a couple nice charts showing allegiance rank for the three heritages. Each numeric rank is associated with a word title. Allegiances are a great asset to any character. It doesn't matter if you're the king or the lowest vassal, there are many benefits to being in an allegiance.
All adventurers know that there is power in numbers.
Perhaps you can't take on the Zombies in the North Glendon Woods Prison by yourself, however with a group of fellow adventurers your task becomes much easier. Since both sides are equal, it would be a fair fight and your group would have a good chance of success. 10 levels spreads the experience points too thin, hence the limit of 10 levels. There is a rather difficult formula used to distribute the experience points a fellowship earns. Experience is divided based on level and the amount of experience needed to gain the next level for each character.