This happens to numerous characters in Magic: The Gathering. Crovax and Ertai each take about twenty levels in badass when they sign up with the Phyrexians. Kamahl takes a level in badass when he becomes the Fist of Krosa, and his sister takes a level in badass when she becomes Phage the Untouchable. And of course, the meta-storyline of first 10 years of Magic effectively started with one determined and slightly less then moral Thran healer taking several levels in badass to become Yawgmoth and then one determined, slightly less then moral and spiritually troubled by his brother's demise human artificer taking about equal amount of said levels to become Urza Planeswalker to combat him.
Don't forget about flip cards – creatures that, if you do what their effect request, turns into much more powerful, Legendary Creatures.
And now Magic has the actual mechanic Level Up, which lets a creature upgrade over time to become truly badass.
Planeswalkers in general. Starting out as regular, everyday members of their species, then after going through a life-changing experience, becoming nigh-immortal god-like beings with the power to walk between worlds (and that being one of the more mundane powers a planeswalker possesses).
Yu-Gi-Oh! has few cards that tells a story, if put together. Cute but weak Gigobyte becomes Gagagigo◊, who is quite badass, but it's not enough for him – with help of cybernetic he turns into much more dangerous◊ forms◊.
In Tail of the Moon, Usagi starts off the series as a bumbling ninja-in-training, unable to get her qualification. She didn't have many skills beyond medicine making. Then the massacre of Iga happens... and she takes a HUGE level in badass.
The basic idea of evolution in Pokemon. Especially for Magikarp.
