It seems like a dude in chainmail and a sword fighting a bear and dying has become blase', and I guess in a world full of wizards lobbying fireballs at ice-breathing white dragons, it would.
I think this is not an entirely correct assumption. It's been pretty true for every edition of D&D to varying degrees, but I don't think it is a necessary result.
However, in my mind, rather than ratcheting up the dude with the sword fighting a bear, I would ratchet down the wizard with the fireball (and mostly leave the dragon alone).
One of my earliest thoughts in picking up D&D, coming from other games, was "Why do the wizards get it so easy?" In 2e, when I started, magic missiles already beat swords (I don't care if it's less damage, I will always do it, and I will do it from far enough away that it won't matter). Fireballs definitely beat +1 swords. An entire class of defenses -- the saving throws -- were only used against magical effects.
3e, to a certain extent, helped this with feats, making saves more universal, and expanding your martial options with things like tripping and sundering. These helped to varying degrees. Feats were perfect. Saves were still mostly magical, but they could be expanded. Tripping and sundering weren't usually good options, and could be pretty wonky when they were used.
4e continued this trend, but went the extra step of turning fighters into "spellcasters" of a sort. It took 3e's markup and kicked it up to 11.
They went the other way too, a bit (they stripped out rituals and focused wizards on attack magic). But imagine if they would've gone the other way around totally. Instead of making "vancian martial classes," what if they took the magical classes and toned them down so that they required attack rolls, against AC, and did damage comparable to weapons. So your fighters have +1 swords and you have +1 spells. So your fighters can (easily) sunder and trip and cause all sorts of havoc, and you can slow and daze and cause different kinds of havoc.
Imagine if lobbing a fireball used the same mechanics as shooting an arrow. Now imagine lobbing a fireball against a bear to be no more or less effective than shooting an arrow at said bear. And that ice-breathing dragon is going to be a bigger threat to BOTH of you, 'cuz this bear is hard enough as it is!
I think 4e decided, to a certain extent, that most people didn't have fun fighting bears, and so went on the other side of the equation, embracing gee-whiz bang-pow fantastic with full unironic gusto, now with more everything. It might be a savvy move to open up the moments of fun in the game, but it certainly alienates those who like a more "mundane" feel, because such a feel is now even harder to achieve than it was before (not that it was ever particularly easy).
So has D&D drifted too far from mundane into fantastical? Is it a bad thing? Can a balance between truly magical and fantastical elements (warlocks, demons, potions of fire-breath) be struck with historical or mundane elements (grizzly bears, fighters, bec-de-corbins?) without one or the other suffering?
To answer the first questions, that depends. It's a taste issue. 4e is certainly MORE FANTASTICAL, but some are going to love it, some are going to loathe it, and WotC is betting more love it/are neutral to it than loathe it (and is probably also betting that new players are more likely to love this than loathe this). For the mundano-fantasists, it's a bigger problem now than it was (and it was always a bit of a problem at least).
To answer the second question, the answer is yes, of course it can be. But you have to
set out to make it that way. 4e especially was never at all interested in making it that way.
My belief, personally, is that I enjoy a D&D game where it is mixed more than I enjoy a game that's all one or the other. Part of this is because D&D, to me, has always meant something of a delightful cocktail of fantastic elements, and you need to mix high magic and mundane if you're going to be able to pull of a large spectrum of that cocktail. To cram Conan and LotR and Harry Potter and Eragon and the Grey Mouser and Warhammer all into the same pot is going to require a pretty big and open pot, one that doesn't say that a bec-de-corbin and a chain shirt is pointless, but one that also says that exploding barrels of alchemists' fire, crashing airships, and granting wishes is just fine.
There is a balance that can be struck. I believe this quite fundamentally. But that balance has to be a goal. Specifically, I think a "tiers" kind of system, or even just the very origins of levels, can work for that, but 4e works against that at both ends. The low levels are no longer mundane at all. The high levels are no longer entirely world-altering in the slightest. 4e's desire to "expand the sweet spot" shouldered aside both of these methods, and thus the 1-20 (or so) feeling of
growing your character.
The idea should be that you go from stabbing sewer rats with a rusty knife and being spat on by beggars at 1st level to towering over the fallen corpses of an entire pantheon of deities who dared to give you a rude introduction at the tippy top. This is the growth that I am looking for. With your chain mail and polearm, you begin; with your dragon-skinned coat and halo of swords you end. 4e is not as good as earlier editions at delivering this growth. This is a (probably necessary) consequence of delivering on the promise of expanding the sweet spot.
I'll come at this again for extra force:
It is not only
possible to meld the mundane and the fantastic into a coherent and internally balanced system, I think it would make the
best game of D&D. I think the level system is, perhaps, the most ideal way to integrate this into the game. I don't believe 4e was at all interested in preserving the mundane. I think this has been part of why 4e doesn't do it for me, since, for me, that makes the game worse.