Perhaps you mean the shader model version?
In HLSL, you can specify different versions of the vertex and pixel shader to use. As I believe you stated, lower versions are more compatible with lesser graphics cards: my nvidia 5000 series runs shader model 2.0, which allows for both pixel and vertex shader 2.0 at max (and surprisingly not 2a or 2b). The benefit to using higher versions however is more space for instructions. Lower versions simply don't allow many calculations to be performed, which is unfortunate when one wishes to incorporate such shaders as ambient occlusion, parallax mapping, chromatic aberration, reflection, refraction, etc.
Imagine this: there may exist infinite parallel universes, all similar to ours, but we may never be able to encounter or even interact with them.
