I fail to see what's so unbalanced about Martial Arts styles, at least as Quintessential Fighter handles them. You can't advance in the style until you've gained the right feats or sufficient ranks in a few skills; that automatically restricts PC applicants to those of certain levels or higher to begin with.
For exemple, the Desert Scorpion style of twin scimitar fighting has as prerequisites: BAB+3 or more, HP 30+, Fort +4, Will+3, and the Feats Ambidexterity, Dodge, Expertise, Two-Weapon Fighting, and Weapon Focus (scimitar or longsword). So already, the lowest applicant for this school would be a level four human fighter. Fighters of other races would need a higher level, and other classes would need very high levels to meet all the prerequisites. And that's just to be an Initiate in this style. Further levels require higher BAB bonuses and more Feats.
Furthermore, all Martial Arts Style abilities are treated as Extraordinary abilities. Essentially, they're like built-in magic items. I don't see what's wrong with allowing Fighter-type characters to boost their abilities in this way, rather then in just piling up magic items over magic items.
And if game balance is an issue, just look at the martial artist's ability, determine what kind of magic item it essentially replaces, and leave it out of the NPC write-up. It would be in-character for such a warrior to refuse using a magic weapon, feeling confident in his fighting skills.
Of course, PCs might stack Fighting Skills and Magic Items, but that just means you're free to pile on some challenges to mess them over.
As for play balance, I feel it's a subjective thing: One party of level 2 PCs might have better odds then another when faced with a CR 2 challenge, simply because of situation differences or PC decisions. Sometimes, you just have to play it by ear.