Actually, some of my most memorable moments in gaming came from failing in a boss battle (ran from too many encounters, didn't have the proper strategy, etc), leveling-up my party, and returning to kick the crap out of said boss.
a leveling story I want to relate:
Back when I was young, and I didn't make some obvious connections while playing my RPGs, there was an RPG called "phantasy star 4" (an awesome game) and in this game there is a boss who has a special force field on his castle. you have to get a special wand to remove the barrier the guy can erect. So I got the wand, removed the barrier, and then proceded to fight him. I used my best ultimate spell (blizzard I think) and it only did 1 point of damage. No other attacks I had did any more damage, so I went back and leveled.
I found a good place to level, where you often fought these worms. If you killed all but 1 worm, there was a very good chance it would burrow into the ground and a huge sandworm would come up. So I just leveled and leveled on sandworms. (a sandworm is actually an optional boss from earlier in the game, so it gets what I call 'boss experiance' which in this game was a VERY good HP to exp ratio) > I came back much stronger with a new power that you are supposed to get near the end of the game that is stronger the more evil the enemy is. Still only 1 damage. So I level more until I'm past the level my friend's older brother beat the game... I use the strongest (I think) combo attack in the game that I can still use, 1 point of damage. So I'm frustrated! my friend says "use that wand you needed to get in here" and sure enough, the wand that took down the barrier to get in the castle/base is needed to let me damage the guy.... so I 1 shot him. and the next boss... 3 shot the boss after that, and so on.
My 2nd favorite leveling story is about the above friend, who thought the game w
as over when you lost to lavos the 1st time in chrono trigger (he was a soft reset fiend, so he would reset the moment his last HP hit zero) and he leveled in that point until he could beat the lavos that you are not supposed to beat. But that is more his story than mine.
I'd like to oppose the usage of term 'grind' in positive context
To me 'grind' is a term that was invented to describe common MMO activities, and since has spread to other similar activities. I don't think you can be that picky about a word's definition that was invented within our life times.
It does make me a little worried though. I want to still be able to compete with the people who grind. Using warcraft 3 as the example, if you don't run around and kill creeps, you WILL lose to those who do. And my friends sit behind me as I'm having my lax time playing saying "why aren't you doing this?" and it makes the game less enjoyable. And it seemed (at least while I kept up with it) every patch made the regular troops weaker so the heroes became more and more important.
I mean, Yes... the people who work harder should be rewarded more, but at the same time I don't want it the 1 thing that wins the game or not. I see other people that feel the same way, so I have no doubt we'll find a good balance.
edit: Looks like boogie bac addressed it a bit already. I was still typing then 