Loss in power definitely is because of ehancements that you lose when you rank up.
And if it’s worth it? Often it’s just… not. You can take a look at the hero’s badges required at all ranks and compare. I remember when I began the game, I didn’t want to rank up my Yax. It was simply because he had a good amount of bonus healing, and on the next badge set he didn’t have any.
And it doesn’t fare much better on later levels. My poor Maleficent on O1… What do I get for ranking up her to O2? Mostly BASIC DAMAGE RELATED STUFF. Damage, armor negation and normal crit. I don’t need that on a control hero with skill power dependant nuke! Currently I’m able to upgrade her defensive stats significantly, and I lose all that once I rank up. For that exchange to be worth it, I’d have to jump immediately to O3, which is not happening because of the scale of that investment.