Let's Read B/X: The Moldvay/Cook Basic and Expert Sets for D&D

[obryn]

Demihumans
While the four main classes can advance to 14th level (and are all mentioned to be able to advance to 36th in the Companion Set scheduled for a later date), dwarves can only reach a maximum level of 12th, elves a maximum of 10th, and halflings a maximum of 8th. The explanation given for that is that it is "a balancing factor". Presumedly for the huge power these classes gain from having infravision and a 2 in 6 chance to hide. Which is of course completely bupkis.
This limitation exists just because. Perhaps as an "explanation", why the world is not full with super high level elves and dwarves as they live so much longer. But why would that apply to player characters? Since there isn't really anything special happening to characters as they gain higher level, this rule is very easily ignored. The tables only go to 8th or 12th level, but you can easily expand them to 36th. If you're just playing the Expert rules, it also doesn't make much of a difference, since the maximum level is 14th anyway. But this is really one thing about old D&D edition that is just utter nonsense. If anyone would actually have felt those other classes are too powerful, they could simply have made them less powerful.

I have never been a big fan of demihuman level limits, either, and to be frank, they're as permeable as all hell in BECMI/RC. After a certain point, demihumans start gaining "attack ranks" instead which just let them get better at their attack rolls with some other special stuff (no hit points or spells, but eh).

The RC introduced an optional way to just keep leveling demihumans, and Dark Dungeons ended up making it actually official and making the XP chart less punishing. This is one of the reasons I prefer Dark Dungeons... I think an effective XP penalty is quite enough.

As for halflings - don't forget their improved saving throws, which is something at least.