The purpose of sidequests in an rpg wasn't always as a filler dime-a-dozen fetch quest, but to offer more difficult challenges for players not content with the main quest's difficulty. The Lagon quest felt in this vein, as he is very beatable at lower levels, though requiring some planning and smart play. Just like grinding for any sidequest in any rpg, it results in being overpowered until the main quest catches up. Problem here is that the main quest isn't finished, and so players that grind to overcome any hurdle are left lamenting. The only required grinding in FoE right now is if you want to seriously take on the dragon.
Course after I beat all available content, I ended up grinding all MC's jobs to max and wound up mid-30s. It's probably best to start a new file whenever Act2 starts up (to preserve difficulty, and because new party members will end up with a case of Can't Catch Up).