Common European Framework of Reference for Languages
I think it would be a good idea to relate the duolingo levels to the Common European Framework of Reference for Languages: http://en.wikipedia.org/wiki/Common_European_Framework_of_Reference_for_Languages. This would make the levels and points more meaningful.
Those categories are really neat but I'm not sure how it would work with this site--there isn't really any way for Duolingo to assess progress after B1 that I can see.
You are right, a real assessment is not possible of course, but some indication would be nice. It is just like those text books written for level A2 or C1: you don't know if you have that level when you work trough the book, but it is nice to relate your progress to an external frame of reference.