That sounds like it would be really fun. That would scratch the powergamer itch that we all get from time to time. You would eventually accumulate an insane amount of conversion, gear, and boons, but would have to deal with increasingly distant level up milestones. In the end, it would probably still be fairly easy, but oh man what a ride. It also sounds like it would have a relatively low development overhead since it doesn't require any new assets.
EDIT: The more I think about, the more I think that this would work better as some sort of ironman mode instead. You start out with a normal kingdom and with the normal post-tutorial resources, except that you can pick any class and any race from the beginning. Once you pick a character, you ARE that character for the rest of the game. When you enter a new dungeon, you retain the exact state that you had when you left the old one.
It would probably be pretty easy, but as the xp milestones get further and further apart, finishing all four vicious dungeons plus the tower might become challenging. You would need to tweak the availability of certain resources to to keep the concept interesting (I think altars and shops would work fine, but potions, glyphs, and especially powerups would need to be limited/removed from successive dungeons). It would probably also be best to enforce a "one visit only" rule to keep people from building up resources on an easy dungeon.
MORE EDIT: I've really got this idea stuck in my head so I might as well get it out of my system.
I think a one-character ironman mode could work with a few simple tweaks:
1) No powerups except for in the very first dungeon
2) No benefits for post-10 levelups. This screws goblins, but seems necessary to keep things interesting
3) Only one health and one mana potion per dungeon
4) Once you purchase/pick up an item or glyph, it is removed from the pool forever.
5) Conversion thresholds should be increased by some suitable amount
6) Once you convert away from a god, his/her altar vanishes from the pool forever.
7) The player can't leave a dungeon until every monster is dead
8) Open-ended stacking items like the alchemist scroll or the trisword would probably have to be excluded.
I doubt that anything like this will ever be implemented, but I'm interested in the idea as a thought experiment. Would a gamemode like this be viable? Are the restrictions enough to make a complete clear of the game an interesting challenge for the kind of uber-heroes that we would be building?