Well Neon, it still seems to me what you are saying in the end is that there will be a lot of wrong ways to use magic, but there will also be a right way. So, after the initial hilarious trial and error period where we all burn down our fortresses misusing magic, we'll find out the right way to do it, using SCIENCE, and from then on, anyone in the know will have a very powerful tool that wasn't there before.
I also have to say, I don't know where you're getting this idea that clerics in full steel would just die on the battlefield. Without any healing magic in the game, I very rarely lose a dwarf in battle to an instant death, except perhaps in the case of lucky goblin archers. However, I do fairly regularly have dwarves come back from those battles short an arm, or crippled for a while. With healing magic, that's no longer a problem. So maybe it takes me 4 fortress years to develop that magic, but then the game is that much easier.
What I would argue is that you should have that tool, and it should be that powerful, but there should be a tradeoff. Not some weird random exploding dwarf tradeoff, but rather, a significant expenditure of my resources, or a significant buildup of some "Magic Value" or some such, which would encourage attacks. So at the end of the day, I've got a fortress with healing mages, but as a consequence of obtaining those mages, my military is somewhat underdeveloped, or I'm facing more powerful foes. I really think it fits in well to fantasy lore that powerful magic is an attractant to monsters and demons who seek that power. In other words, magic is just another path where the dwarves can dig too deep, too fast, and unleash horrors upon themselves, like with other fun stuff... but handled carefully, it can be an invaluable tool to your fortress, but a tool that comes at a significant cost, due to its significant value.
You make good points in saying that a lot of things in DF are unbalanced or useless, but I would think ultimately those things should be given some use. So for example, billon should be worth a little more than its component parts, seeing as how it took extra time to make, because currently it's pointless to make it. We should be moving toward better balance, not further tipping the scales.