the best source to find out what happens if you upgrade the pillar is the Dungeon Journal. You will be surprised of the how clearly says what happens.
Also there is a maximum number on how many levels you can have. So eventually you will have to move him at least to another one.
But that not good tactic to be honest. Take a look in Dungeon Journal
the idea behind Lei Shen is that he harnesses the power of pure lightning to control his palace. he empowers his machines and his weapons using his own power. in essence, he is the battery that powers his empire. his power is so great that you need a conduit to divert his power away from your raiders (read: the AoE damage). but any device that takes power of that magnitude for too long will be overwhelmed and short circuits. however, his power diminishes as he gets weaker, and since energy can't just turn into nothing, it seeps into the strongest conduit and overloads it at the end of the first and second transition. when the 3rd phase starts, he's severely weakened and doesn't have enough power to activate a conduit. he can however still empower his weapons and activate his wind barriers. When he dies, his palaces loses power completely, lifting all safeguards guarding Ra-Den.
that's the lore explanation behind the Lei Shen encounter, or at least that's what I understood from it.