The gear so far that I have found and/or seen, HEAVILY favors casters over every other type of class. Having low-magic equipment in a high magic setting means that casters/gish-type characters will always be more prepared and useful than spell-less peeps.
With some clever design, you can cater to both types of characters. Weapon could have +2 magic and 1d6 fire, or +1 and Keen, so that casters could choose which one they want and use a spell for the other. You could have a +0 weapon with Keen even, for those with Greater Magic Weapon. Have some weapons with a 1/day Keen Edge, or Flame Weapon spell, or GMW, and don't be afraid to boost the caster level to have it be relevant for more than a couple levels. The Monk vendor sells a FANTASTIC selection of stuff, and it all has real utility and value, like fighting undead or constructs. Why can't all gear be designed this well?
Why does every piece of gear have to have a huge drawback? Frog Boots are a great example of this. A case could be made for an item with a bigger-than-average bonus for it's level to have a drawback like that, but you don't need to punish every character just for wearing the only pair of boots that is available to them.
Part of that problem is the lack of variety. If you need content, whip up some guidelines and let players submit their own. I.E., level 3-6 gear can have +1 or equivalent enhancement or +2 to a skill, levels 6-9 gear can have +2 or +4 for skills, etc. You could even incentivize players with gold rewards or something to encourage contributions.
Whether or not you increase the max item level or not, there is a lot of improvements that could be made going forward.