Yea, I think people are misunderstanding the concept of overpowered (either that or my sarcasm meter is off, which certainly could be). It refers to things that are basically game breaking, things that allow you to simply dominate with little or no effort on your part. Walls/draw bridges, cage traps, danger rooms and arguably magma certainly fit, other things could use balancing out a bit but are hardly overpowered or they are overpowered but too easily obtained due to other overpowered things (such as steel armor, if you didn't have magma as free unlimited easy to find and harness fuel then it wouldn't be so rapid to produce and thus less of an issue). I don't have as big an issue with wooden axes because even though its absurd to have a wooden axe we don't have stone axes which clearly exist and were used to chop down trees, that said I don't use wooden axes as a personal limitation).
Some things to help fix these problems without resorting to just not using them would be if there were monsters that could break down walls (really, IMO, the strength of barriers should be door, floodgate, drawbridge, wall, and if we wanted to be even more complex and awesome there could be different strengths based on material, so a metal door/floodgate/drawbridge/wall would be stronger then a stone one which in turn would be stronger then a wooden one, and all of the above would be stronger then just natural dirt walls. Also if cages had strength linked to the materials they were built with that determined what they could catch and what would break out (so a pine cage could hold a tiger perhaps, but not an elephant and certainly not a giant or a dragon).
That would help solve two of the biggest overpowered abilities in the game, as for magma there are a few ways to fix it in my mine aside from what has been mentioned here. You could make it so only a higher level smith could use a magma forge (after all it would be more dangerous), or require that magma be moved from the magma sea/volcano to utilize without risking an eruption into the forge (mentioned above) and that moved magma would eventually harden up rendering it useless for a forge (I could see this as something toggleable in the init files so you can turn 'magma hardens' on or off).
Danger rooms aren't a bad idea in themselves, but to make them more 'fair' they need to reduce the experience gain and increase the risk of getting injured/killed.
Ultimately its hardly the end of the world, I have no problem providing my own limitations in the game and just not using things I find too powerful which really leaves the option for others to use them if they want to so we can all have the game we want.
-MB