I...I lean against this idea. At one point I really liked it, but...but it becomes...pointless. It makes the game feel a little pointless, really. It hinders the ability of the player to actually feel as though they are getting stronger, not to mention it hinders realism. In most games where this is employed, even tiny little bugs become a challenge to a party that should be capable of crushing lions, let alone insects! It's unrealistic to see something like, say, a Blue Imp become as powerful as someone who can defeat Lavos.
Okay, maybe I'm exagerating, but I don't like this feature. However...if it's just for New Game * and not for the entire Chrono Trigger + experience, then it's okay.