Greetings!
Indeed, unless the DM has made special contingenices and gone through the work of extensively *fine-tuning* his 3.5E, et al campaign to specifically being a *Low-Magic* Campaign, then yes, it is generally true, and a necessity for characters to become essentially "Christmas Trees" with dozens of powerful magic items covering every slot, or else they simply, *mechanically* will not be up to facing and succeeding against the foes that they face as they progress through the levels and rise in power.
As an aside, and not aimed at anyone in particular, but really, I shall make a pointed observation. To wit--
I listen to people bitch about how 3.5E has become *bloated* and groaning under the crushing weight of all of these rules, too many options, hundreds of prestige classes, thousands of spells, hundreds and hundreds of magic items, the *Christmas Tree Effect*, and so on. Thus, the game needs 4E, and the time is right for a new edition, even long overdue.
Now, wait just a damned minute. I call that absolute hypocrisy. I well remember many many people--lets say to generalise, I imagine--these same people--in days not so long ago, where they bitched, and moaned, about how D&D in the new edition (3.0, 3.5) *NEEDED* and that they *WANTED* lots of "flexibility"; lots of "Customization"; Much more "Options", more *Cool Items"; blah, blah, blah.
3.0/3.5 GAVE US ALL OF THAT. Now, somehow, they don't want that, and it's high time for a new edition? How about make up your minds? I mean, damn...the same thing is gonna happen with 4E, because gamers always want more, more, more! Guess what? Eventually, 4E will be "Bloated" with too much everything as well!
Geez.
How about this--it doesn't matter if WOTC puts out 100 books of everything. You don't *NEED* to allow everything into your campaign! I thought that was said more than once in every other book and supplement WOTC has put out over the last 8 or 10 years. It's the DM's responsibility to take their campaign seriously, and continuously craft the campaign so as to maintain their own campaign balance, and not damage the flavour, integrity, or *FUN* of their campaign!
Otherwise, just expect every 5-8 years a new edition of the game, with a whole "new" product-line of books and stuff to buy. You all then shouldn't damn well be whining and bitching about this stuff then.
It just frustrates me that it seems like so many "gamers" are so inconsistent, irresponsible, indecisive, and whining. "X" number of people complain about stuff, for how long? Well, yeah, WOTC is gonna respond to that, naturally, and make a new edition of the game!
Ok. Well, now that I got that off my chest, I shall proceed my friends!
It's partially "gamers" fault for the whole escalation of magic items, the "Christmas Tree" effect, and so on, because they've complained or begged that they wanted more, more, more. Then, it's also partly the fault of the mechanics, because the mechanics require you to be a "Christmas Tree" to be successful. Then, of course, to some degree, at least, it could be argued which came first, the chicken or the egg? Mechanics+Complaints+Mechanics+Complaints, etc, etc. Mechanics are often fashioned in response to new rules and doo-dads, which have been emplaced in response to desires and complaints of the fans, and you just keep on endlessly spiralling.
Thus, much of the *magic* has been sucked or designed or edited out of the game as designers seek to provide things the fans have said over and over that they wanted, and the whole Christmas Tree/Arms Race just keeps on going, and is enmeshed deeper and deeper into the game.
This then, of course, dissatisfies a good number of other fans, as well as DM's in particular, that are now and constantly faced with the ever-present "Christmas Tree Effect" and constant *Arms Race*
I agree, and lament the degeneration of specialness, and mystery, and wonder of magic items, and, as others have aptly pointed out, mechanically, and economically, many of the great items that provided such wonder, just don't keep pace with the larger and higher priority needs of the players within the meta-context of the game. Such items, while on occasion *useful*--are still, nonetheless, of a lower order in value compared to hard armaments.
This really is an enmeshed, constant problem that will not, and cannot, go away. So, what is the solution?
This solution brings me back to some earlier commentary. The solution is the DM must take responsibility for protecting, crafting, and maintaining the fun, balance, and integrity of their campaign. Better sooner, rather than later, my friends.

SAY NO TO 90% of the prestige classes. Or all of them, except for 12 or 6 that you carefully select. Same with spells, magic items, feats, and so on. Whatever you have to do. Take control of your campaign, and make it your campaign--and not merely the constant sponge to whatever WOTC markets, *and* everything the players may seemingly demand and cry for.
Do that NOW. Or start a new campaign with the rules, and do it then. Or start a new campaign with 4E, whatever. Point is, the DM must remain in control, and vigilantly craft and maintain his or her campaign.
Otherwise--You and the group will simply be "Going Down The Road To Hell".

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*"Going Down The Road To Hell" is the name of a module I made for my campaign world of Thandor.
Semper Fidelis,
SHARK