I disagree here. I think you could make an RPG without skill development as long as it would feature meaningful character creation options.
Most games do just fine without XPs and level ups. The defining feature of RPGs is their adaptability, masturbation through incrementation is just something tacked on.
I'd love to see sensible skill improvement system, but static stats wouldn't be half bad.
Also, gameplay can, and should be changed to facilitate immersion, so being an all-out immersionfag isn't that bad.
I have a lot of immersionfag within me, too, and a strong propagator of realistic combat systems with locational damage and wounds mostly replacing/being added to simple HP system.
(And if I ever told you the plans for my perfect RPG ideas, even the hardest immersionfags would call me crazy for actually wanting to go to so much effort for little details as I would.)
But I do believe that character development is an integral part of RPG gameplay - but, of course, that is not necessarily tied to gaining XP and levelling up (though I do like that system, but would change/adapt it to offer a more reasonable range of progression). Just as important - and often overlooked - are item progression, progression in more than just numbers, and progression through alternative means than XP.
I could elaborate in detail but it would derail the thread too much, so I'll just explain in short.
Usually, you are flooded with loot, and especially if magic items are common and you constantly get weapons that are +1 to your old ones, it soon feels insignificant. Getting upgrades in equipment more rarely and having the differences be more significant (and I deliberately say differences, not upgrades or some other word that would suggest strictly linear progression of item quality) makes it much more important and character-defining. Example: armours in the Gothic series.
Progression in more than just numbers is just as important. Going from 5 to 50 in swordsmanship skill and therfore gaining 40% more to hit chance and 70 more damage points is not half as satisfying as learning a new special move that can cripple an enemy. Getting +++damage to your magic spells isn't half as exciting as being able to cast a new type of spell. Etc etc.
Progression through alternate means would be things like reading books, going to trainers, or being shown a special move as a quest reward.
All these points would improve the "progression" part of RPGs quite significantly, while not changing the principle of becoming more powerful over the course of the game. It would also immensely contribute to the boners of immersionfags, because these measures would not only provide a more fun, but also a more realistic (or believable, if you prefer that term) gameplay experience that feels more natural and less gamey.
So yeah, the problem is not that RPGs have progression. It's RPGs having numbers going up by raising another number (XP) instead of actually connecting the levelling up process to the setting and to the rest of the game.