3) Eliminate all the bonuses for taking penalties (like drunkness, having one eye, etc.) Having them just promotes munchkinness.[/QUOTE]
I dunno, I thought that the suggested limit of 40 points worth of disadvantages took care of this satisfactorily ... granted, it is explicit that the limit need not be used.
I still like the idea of being able to construct a character like the blind swordsman(for those who don't know, this was an old japanese tv show ... I think ... which was later resurrected in the form of a movie called Blind Fury).
I also think that the new Unearthed Arcana has an optional mechanic similar to this, but feel free to correct me if I'm wrong; I don't own the book myself.