Hoo Boy
There are simpler systems than D&D out there...
But, yeah, someone who focuses entirely on diplomacy is an expert, not a rogue...or perhaps an Aristocrat. The PHB classes are the people of the world that go into dangerous areas and come back with treasure. Other characters are mostly NPC classes.
Yeah, they kinda suck, but so does a Rogue without sneak attack.
Personally, I'd allow you to switch out sneak attacks for feat(even though that's not the best idea, balance-wise), but I'd more encourage you to take an NPC class that fits your character type better than the sneaky Rogue.
3e D&D is about lots of magic...you just can't avoid it. If you want to remove or weaken spellcasting powers, and that's fun for you, go for it, but that's not what the game was designed to handle.
What happened to dark and gritty? It's still there. Limit your PC's to NPC classes and see how gritty it gets. If you want a common-man-against-impossible-odds kind of quest, Commoners and Warriors and Adepts work very well for the purpose, making battles harder and more deadly, while perhaps playing up on the non-combat skills of each. Dark and gritty is about atmosphere...D&D is not, by default, about dark and gritty. It is, to a certain extent, about flash-bang-kaboom.
You can make it dark and gritty with a little work, but you can't expect WotC to make it dark and gritty as a default.