Most games follow a pretty simple loop. The game presents a challenge, the player masters the challenge, and the game presents a harder challenge. Or if the game doesn't present a harder challenge, the player generally moves on. This idea is elaborated on in Raph Koster's Theory of Fun.
And most of MMOs work like this. As you level, the game presents harder and harder challenges for you to work on. Generally future raids and dungeons are more difficult that previous raids and dungeons.
But not when it comes to alts. Lately, it seems like most MMOs have your second or third character be an easier experience than your first character. Even before special effects, your first character involves you learning the game, and figuring out exactly how things work. So even if the difficulty was the exact same, you'd already have demonstrated mastery.
But modern MMOs are going further than that. They often give out effects that make leveling a second character less of a challenge than the first. For example, WoW has heirloom gear. The Old Republic makes your second character's companions more powerful.
But is this really a good idea? If you go back to the Theory of Fun presented above, this is the exact opposite of how a good game should act. The game should acknowledge the player's mastery, as evidenced by the first max-level character, and present a slightly harder challenge. Presenting an easier challenge will only lead to a player getting bored more easily.
Of course, this might be hard to implement in an MMO. Perhaps the best way would be a slider that increases the rate of XP gain, but also increases the amount of damage you take and decreases the amount of damage/healing you do. Of course this may have to be disabled in group content.
I think that the current approach to alts--giving the second character more advantages than the first--may be counter-productive in the long run, and may lead to players losing interest faster. The Theory of Fun implies that leveling the second character should be harder than leveling the first character, to keep the player interested and invested in demonstrating mastery over the new challenge.