I'm glad that some people are interested in audio-quality and bitrates and all that. But I never will be. If somebody has the music collection, the equipment, the trained ear and the time to do so, great.
caller#6's use case
Miles Davis recorded 'round Midnight 35 times.
MB currently has 136 "recordings" of 'round Midnight by Miles Davis. 
I might have the time to add all the performance ARs to the 35 session/recordings before I die. I definitely will never have time to add duplicates for each of the remaining 101 tracks.
On the word "recording"
I agree with mudcrow. To me the word "recording" will always mean the original act of performance/recording, as in "what year did the Rutles record their first album?"
On the number of levels
I agree with reosarevok. Further levels should only be created if doing so won't create (even more) confusion.
For me, that's not a problem because I will never be interested in editing at the master/remaster/bit-rate level. If somebody has the collection, the equipment, the trained ear and the time to do so, great.