I'll tell why magic is overpowered. It's because it's EASY. Yeah, spend 30 minutes reading a book, and you now have power to tear reality a new one. Fighters can... swing a sword a bit harder.
You give the same ammount of experience to both players, and one gains a bulet proof vest, and a handgun, and the other gains only shorts and a shirt, but he gains machineguns, rocket launchers, grenades... and a portable force field generator.
Magic in 3.5 got too easy to do, and thanks to the multiclass and PrC rules, you can easily multiclass into something else to gain many more abilities without slowing down your spellcasting.
In older versions, a wizard had to work hard for his magic, but when he did, he was the guy with the "big guns" in the group. In 3.5, he starts with all the good stuff at very early levels and gets stronger and stronger.
Seriously, the devs got excited in giving casters more power and lost track of what they were doing.

About the high magic thing, I agree. The problem is that the game's rules for non casters leave them behind, while the casters are playing high level, high fantasy, high magic campaigns.
At higher levels, wizards should be able to reshape reality as they see fit, true, but non-casters should be able to do epic stuff too, not be able to do the same mundane things they were doing 15 levels ago.