I would intelligent opponents acting the way average poeple would in a world where the rules were different. Let's consdier the sleep spell to be equivalent to carrying around a grenade. If wheezing Jimmy is carrying a grenade than modern folks would see him as the primary threat. Similarily in a fantasy world where the decision not to wear armor while adventuring is either a sign of reckless overconfidence or an "I am a spellcaster" logo.
Seriously? Does every commoner wander the world dressed in armour? the outlying farmer, taking his goods to market, dresses up in chain mail, and straps on a bastard sword, in case he gets waylaid by a band of nomadic bandits? The Noble, delivering a diplomatic message? The caravan merchant plying a trade route? Both the noble and the merchant would be accompanied by strong warriors, but probably wear attire more suitable to their station. How common is magic? How common is being brutally killed by a swordsman? What has the average Kobold seen more of? IF the kobolds have seen and understand the power of arcane magic, AND understand the PC in question is a wielder of arcane power, are they not then more likely to panic and flee, rather than chuck a few ineffectual javelings?!? The wizard hardly has a notice on his forehead saying "1st level spells only (2, 1 used)".
If you want to kill the wizard, just do so. But don't wrap it up in a "spellcaster-logo" excuse. Because while the light-clad jimmy might be a dangerous (or a noble, or a merchant, or a scribe, or a human donkey, or a former captive, or a .... you get the idea) the axe wielding ½-orc most definitely is dangerous
I'd argue, that much of what is normal in our world is normal in DnD, but the spotlight is on the unusual, because that is what makes for interesting adventures. I don't want a dishwashing skill challenge for 3rd level characters. In any edition of the game.
Futhermore, Jummy has to declare he is casting before initiative is rolled. Even if the grenade was not obvious in advance, it sure will be when he pulls it out. It doesn't mean that a grenade is bad (it is very, very good) but rather that it is never ideal to be the most obviosuly dangerous thing around.
Ask the people who had the displeasure of carrying flame throwers into combat . . .
The Kobolds should also have to "declare" (iow, the DM should think what the kobolds are trying to do, before he lets the players' intentions colour their plan). Additionally, there is a reason why kobolds are not top of the food chain...
It is not obvious that a grenade or a flamethrower is dangerous, unless you have seen the effect of one, or had one described to you. In the modern world, we are quite well informed of modern weaponry. How informed is a tribe of kobolds, eeking a living stealing from farmers' fields, and avoiding lizardfolk? Secondly, are you expecting to see it? Your concentration is divided amongst 4 or 5 antagonists, especially some rather large and threatening ones much, much closer to you. To continue your allegory: there is a M1 Abrams between you and the flamethrower guy, and it is heading towards you!! So Mr Al-qaeda guy, you gonna be cool and try to take a shot at Flamethrower guy, or hunker down in your foxhole and hope no one sees you, or maybe, just maybe you gonna run?
Furthermore, I'll reiterate: it is even less obvious that kill or be killed is the best solution to the situation at hand.
If we go back to a DnD situation, There are always other options:
1) negotiation
2) surrender
3) flight
4) capture
However DND, in all versions, has always had a majority of players that never negotiate, nor surrender, always pursue, and very seldomly show any form of mercy.
I just like to make it clear in my games: word gets around, and you reap what you sow. Regardless of version.