Moderators can read the minds of forum users, and they use that information to manipulate how we act in the airsoft world!
lol To jump off of what sticks.13 said, think of a mod lv 1 as a trainee mod. He is allowed to moderate less important areas of the forum, get some practice in as well as demonstrate to Admin that he is capable of the responsibility he was given. If he proves himself capable then he is promoted to mod lv 2, where he simply moderates the rest of the forums.
The reason for this is, there are a lot of untrustworthy people out there, and it wouldn't be to the benefit of this forum if a mod went around editing post to inappropriate behavior, and deleting a lot of things.
The reason Admin is the only one who can IP ban is probably a safeguard, he wants to make sure that when someone is being punished to that extent it is well deserved. Not to say that he doesn't trust his moderators, simply to say that it is a finale decision that requires his intervention. It prevents total corruption of moderators and forces them to go through a process to IP ban someone, as oppose to just being able to do so at will.