Except in the case where there are sage bracketing, there is nothing wrong with leveling up when able. Now, I'm not saying you should spend extra resource for the sake of level up (granted, there aren't exactly a lot of way to do that, or significantly) but you certainly shouldn't purposely slow down.

Fact of the matter is that a player who is lv 65 stuck at lv 56 instance is STILL better off than a lv 55 who can clear all his instance.

Again, this is aside from sage bracketing, it is a valid reason to want to stay in the lower bracket and thus hold your level below the cutoff.