vagabundo
Adventurer
I'ved DMed a long time over multiple game systems whether they be versions of D&D or GURPS (a game system I love, but is just too hard to play for too many people), I've yet to play a game system as heavily favored towards the characters as 4E. Even my friend who for the most part likes 4E is making house rules to boost the lethality of the game. He can barely stand that undead went from scary suck your life away creatures to easily killed do a little necrotic damage lamers.
That's funny, it is the complete opposite of my experience. I find 4e combat more balanced than 3e, but I would not have to try very hard to kill my PC, if I put my mind to it - I like to challenge them, not kill them. I've had a few PC deaths.
3e, in my experience, turned into a save or die game with very little the player could do about it or a 2 round mob the leader and mop up session. 3e combat was lacklustre.
On your point about the players focusing on their powers and ignoring the story - they are obviously enjoying that part of the game more than the stoytelling. Maybe that is their preferred playstyle and 4e gives them an outlet for thatit, it can be unsatisfying if there is a disconnect between the playstyle of the DM and the playstyle of the players.
Addendum: My favourite parts of of 4e are the streamlined d20 core (combat chapter and skill systems mostly) and rituals.