SEO does "level off" at some point, occasionally, but it is never ineffective. I have worked with companies to bring them up to number one on key terms. In one example, a company I worked with became number 1 on all main product categories after I had worked with them for over a year. So I started noticing their traffic leveling off slightly, remaining almost the same, though still showing a slight increase that I would usually attribute to being an insignificant increase (a few percent). It was at that point, I spent my time keeping them in place, and learned very quickly that it wasn't the time to become complacent. Just reducing my efforts for 2 weeks, saw a decrease to third place for several keywords. This is why SEO maintenance is one of the most important aspects of SEO

Complacency is never an option with SEO, and while promoting the concept of a permanent budget for SEO may seem like an attempt at simply trying to keep the Online Marketing industry alive, it is in fact a legitimate point, because there will always be someone ready to unseat you, whether you are a 5th place, or 1st place.