In my opinion, encounter powers are one of the most narrative-driven aspect of the game, because they correspond so well to so much of the sort of fiction and pop culture that I use to inspire my stories (not necessarily directly in terms of setting elements or plot points, but often thematically), like fantasy and scifi novels, shows and movies, anime and comic books.
Those types of fiction overflow with terrific heroes who can do tons of amazing stuff....but who often tend to only do their cooler stuff pretty rarely, and otherwise default to a few basic moves.
Superman is the prime example of this. He has a huge assortment of powers which he can theoretically use at will and which when used to full capacity should render 95% of his enemies non-threats. For example, his upper level speed showings alone in the comics put him at much, much higher than the speed of light, which when combined with planet busting strength means he could easily throw nearly any enemy into space before it could think.
But that isn't how Superman actually fights as the story unfolds. If he's going to do something really high-end, he'll do it once a story. If he's going to use heat vision or freeze breath or x-ray vision or any of his other more esoteric powers, he'll probably do so just once or at most twice per a 22 page. comic. The rest of the time, he's mostly a fast and really strong guy who can fly and punches damn hard.
To me, that sounds a lot like how an encounter will function--the "throw them into space" move is his daily, the heat vision and freeze breath are encounters, and the superstrength is at will.
Other serialized formats are often similar. Take an ongoing, combat-heavy story like Berserk or Rurouni Kenshin. Gatts has his arm cannon, his crazy-ass armor, and a load of crazy techniques. But he never just spams any one of them, except for his basic deadly swordsmanship--his attacks get used roughly in inverse proportion to how powerfully they are. Kenshin knows a million crazy techniques, but never uses any but the most basic few more than once per fight, and has a few he only ever uses a few times in the entire series--again, the more rarely used the power, the better it is.
Sometimes there is a good simulationist reason for why the characters don't just spam the techniques--they require a direct and explicit investment of power or some other resource that renders them difficult to repeat at will. But often that justification is flimsy to non-existent--logically, Superman really would throw a lot more giant monsters into space than he does.
But regardless of whether there is a good simulationist reason (and honestly, for some characters like the Flash or Martian Manhunter, there is virtually never a good simulationist reason because their powers are just that uber), there is always a good narrative reason, and that is that Superman constantly flinging everyone into space at the speed of light doesn't make for a good story. And sure, sometimes he just fights enemy that can fly and breathe in space and its a non issue--but maybe that flying-space-breather makes no sense for a certain story, and you don't want to waste a ton of page space on fanwanking reasons for Superman not to instawin every time, so he conveniently "forgets" to operate below full capacity, or you say he held back out of some wierd moral principle, even though it mostly resulted in him having to struggle way more with the fight than he "realistically" should have--but in a way that was probably more fun to read about then the "realistic" fight would have been.
And by the same token, moves get less cool the more you see of them--so if you want a move to seem special, the hero shouldn't use it all the time. Gatts busting out the arm cannon once a fight is badass--Gatts camping out in a tree and cannonballing dudes all fight every fight, not so much.
Balance is a narrativist concern as well as a gamist one, and fiction abounds with stories that prioritize balance over simulationism for the sake of the story. That doesn't mean they always have to be at odds, but its a fallacy to pretend that simulationism=narrativism
In my opinion, encounter powers and daily powers are 100% narrativist. The heroes use their coolest powers more rarely because that makes for a cooler story--the powers remain cool, and the fights are as challenging as the story needs them to be.
