I'm convinced that those working the boards have hearing loss as a job requirement. It is amazing how in tiny venues that bands can be way too loud.
What it is, actually, is that your ears attenuate sound better at higher volume. You can't listen at that high a volume for very long though.
The problem is that bands sound better, louder. Probably this alone has created the phenomenon of people skipping all the openers to see the headlining band. How many shows have you been to where you show up early and by the time the band you want to see is on, your ears are worn out? (Eh, just get drunk and who cares, right?)
A band that sounds good, properly mixed does NOT need to be that loud. The situation is that you're dealing with a ton of variables.
The band could be shit, the band's gear could be shit, the PA could be shit, the FOH guy could be shit, the guy the band brought to mix them could be shit...or somebody could just be all "metal needs to be loud" or just not have the balls to mix properly.
It's pretty much the exact same thing as the loudness wars with CDs...
I'd like to add...That Fates Warning set that ProgPower I thought was very well-mixed. It was at the perfect volume level and contributed greatly to my enjoyment. The fest has always been "interesting" with volume levels for me. Some of my favorite bands I couldn't listen to inside the room because the keyboards or guitars were so high they felt like icepicks in my ears....and some others are just perfect in every way.