At lower levels, actually, if you look at the difference between a loaded PC and a non-magic PC, there isn't a huge difference.
A 7th level Fighter has 19k in goods. That's a pair of +1 weapons (4700 gp), +1 armor (2000 gp (ish)), +1 shield (1300 gp), a +2 stat boost item (say str) (4000 gp), a ring of swimming (2500 gp), assorted potions and such (2000 gp) and non-magical gear (the rest). I know, this is rough, but, it works as a fair guideline.
Now, how much stronger is this fighter than a fighter with only masterwork? He's got +1 to hit, +2 to damage, +2 AC, a skill bonus and buffing options. Sure, he's superior. But, how superior? Let's compare him to an 8th level fighter.
Vs an 8th level figher, he's +2 to damage, +2 AC, less of a skill bonus and same buffing options. However, his saves are lower, he's down a level for various effects, he's missing a feat and he's got 1d10 hp's less. Is he more powerful? IMO, no. He's close, but, I wouldn't say he's stronger than the 8th level fighter.
So, effectively, equipment (other than for affecting DR) is less of a change than a full level. At higher levels, the difference is more pronounced. Jump up to 14th level, and I would say that it's certainly more than a full level difference. But not two.
Really, except in the case of creatures with DR, magic items don't make THAT much of a difference before double digit levels. For at least half the game, the difference is small enough that it can be more or less ignored except in the case of DR.
I'm sure I'm going to get blasted for this. OTOH, I would LOVE to see a more comprehensive examination of this. Baseline say 7th and 14th level characters and do the comparisons. IMO, I don't think the differences are as much as people think they are. Not if you follow the wealth guidelines.