I find myself on KarinsDad's side here - to me, having any class or race that can be teleporting around an essentially limitless number of times a day breaks ranks with all fantasy literature that I've ever read (i.e. pre-1980) and conceptually with all swords and sorcery that I've read or played.
The whole "shifting into the shadowfell" thing, I think, has an uncanny resemblance to Bilbo Baggins using the One Ring in
The Hobbit. Maybe it doesn't to you, and I admit it's far from an exact match, but that's what I thought about when I first read it.
And eladrin fey step absolutely obviates climb and jump for many typical low level obstacles - climbs and crevasses. Not to mention bars and grills.
And again, maybe it's a difference in DMing style here. I've rarely been particularly successful at injecting these kind of low-level, dead end obstacles with much drama. Thus, it's absolutely fine with me that the burden of negotiating the obstacle is shifted from the guy who can climb/jump really well to the eladrin.
Unless you planned for it to be an impassable obstacle (Kamikaze Midget's "wrought iron fence made of tigers"), in which case I can see and share in your annoyance, then you want the party to get across these kind of obstacles. In most cases, all the eladrin is doing is skipping either a die roll, or the need for a specific piece of equipment. I think that's okay. That's his racial ability, and he's paying the opportunity cost for it.
Furthermore, I don't know what kind of game was being played by those who claim that wizards could outdo every other class in 3e, but frankly I never saw the 3e wizard get close to the functionality and survivability of 3e clerics or druids. Yes, there was a problem with casters vs non-casters in 3e relating to what they could potentially accomplish, but that was true for all casting classes (and more so for the divine casters).
And finally, as a both as a player and a DM of paranoid 3e wizards, I can say that short of an extreme ambush situation, the wizard is easily the most survivable member of the party. As an optimized wizard, my AC was always through the roof. High Dexterity, mithril buckler/shield spell, (greater) mage armor, protection from evil, and spells like dragonskin or pre-errata alter self all provided a plethora of stacking AC bonuses. And I was a crafting wizard, so my save-increasing stats were high, and I had the best cloak/vest of resistance. Plus, you have spells like (greater) invisibility, (greater) mirror image and (mass/overland) flight making you unhittable to begin with. And then if all else fails, you're the party member who can instantly dimension door/teleport away in an emergency.
Again, if you don't think the Wizard was the most powerful member of a 3e party, you were playing them with self-imposed restrictions which were not part of the rules of the game, or not part of the social contract in all groups.