J'zargo isn't level capped, so he can be a beast at high player levels.
He doesn't use high level spells, though, so he doesn't utilise his level.
Unless you're someone with mods.
Until you just said something, I was under the (apparently mistaken) impression that Destruction spells would increase damage with player level. I just looked on uesp.net though and that doesn't seem to be the case. That's really OK though, as long as he is getting more health as he levels up, he will fulfill his main purpose of distraction/decoy. I'm kind of keeping him over other followers for RP reasons, my character is a Khajiit who joined the Mage's College pretty early on, so I figure that him and J'zargo would hit it off and be frequent travel companions. I plan on using some others at some point though, maybe soon, just for the sake of variety/new adventures.
Also, I see that J'zargo does apparently have and use Paralyze, which is an Expert level spell. I haven't seen him use it, but he might not be able to yet because my level is only in the 30's.