I think it's fairly well balanced. It's the spell power versus versitility. You're down 2 spell levels, and 3 caster levels in your spells, so your spells are not quite as powerful and a bit easier to resist, but you get a huge variety of spells that can help you make up for it.
Keep in mind the other thing you end up being short on is actions, so a Mystic Theurge has to look to cast spells more because he has so many of them.
I find it strange that for a class that so many people screamed "This is unbalanced!" about, that it's actualy getting more support for being underpowered.
Another interesting twist on this is the Arcane Hirophant from Races of the Wild, which is Druid/Arcane, and a bit more flexable beyond spell casting. You end up with a 4/3 split of levels due to a requirement for the class, but you can still cast high level spells (6th for both at 15th), you get a companion familiar, and can still wildshape.