I mean I guess it would be handy to hold onto all those Pidgey, Weedle, and Caterpie to do some incredible leveling all at once, but honestly, I think that's just getting a bit excessive. In the time you took to catch all those and horde them, you could have just been transferring and evolving as you went. Maybe the statistics would disagree with me, but that's just too much.
Pretty sure the only way I'm going to buy more Pokémon storage is if the latter generations are released and they don't automatically increase your storage. Other than that, it's soooo not worth my precious Pokécoins!
It's not about leveling up faster, the lower level you are, the lower level the pokemon you catch will be! If i were to create another account right now, after playing through to where I am now, I would definitely upgrade my pokemon storage.
Sure you level up just as fast with catching and transferring as you go but you're gonna have to try harder to catch all those 200cp pidgeys! I personally don't transfer and level up as I go, I catch 400 pokemon (fill up my storage) and do it all at once with one lucky egg that way I'm catching the lowest cp possible.