Obviously there are systems like that. However, you have redefined your valves once again so that reality matches the math. You have also added another output to the controller so your math matches reality. None of this was in your original post. If you would have mentioned all of this up front I would have thought it was OK. I still wouldn't let you off the hook though. I would still point out the high or infinite gain controller will not work. Why do you ignore this? Even the TankLevel.sce control starts to look rough when I truncate the PV to match a feedback resolution of 0.001m.
See ftp://ftp.deltacompsys.com/public/NG/TankLevelWithQuantizing.gif ftp://ftp.deltacompsys.com/public/NG/tanklevel.sce ftp://ftp.deltacompsys.com/public/NG/TankLevel.gif
Compare with my previous TankLevel.gif. You can see how just a little reality can ruin a theoretically perfect control scheme. My gains aren't near as high as yours. I haven't even included noise or ripple caused by the in and out flow. Tim has been giving me/us a pass so far. Your high gain system would be very hard on the valves if it work at all. The control output would probably just go from one extreme to the other.
Quantizing/feedback resolution can't be ignored. This is one of the biggest factors that limits gains. BTW, what is your sample time?
Peter Nachtwey