My life would suck without you
So until you've defeated the elite four for a region you would be forced to leave your old pokemon behind (think customs stopping you at the gate) and would only be able to access them while you're in the old region. (or battling/trading over wifi) Then when you have defeated the elite four of the new region you can use any of your pokemon in the post-story (end game) section of that region.
So each region would have the same levelling curve (lv 5 to lv 70 approx) during the story but as Elendil said the battle A.I could be improved with each region. (among other possibilities to increase difficulty)
It has the benefit of creating a fresh start but keeping everything together in one package.
If they were to make a game with all the regions, I'd like them to do this, but they won't so...
I think it is much better than being able to have access to your other Pokémon, I don't want it to be like G/S/C again where the E4's Pokémon are in the 40s.