The PCs in my campaign have +1 weapons at 9th level (well, 1 just got his upgraded to +2) and they seem to have fun... 
I like to use monsters, demons, et al - I just like to have a good reason why they're there. I believe in credibly maintaining suspension of disbelief, which some people don't seem to care about - eg if the highest level spellcaster within 100 miles is 8th level, you're not going to be able to buy +5 swords on the open market. If there are any, they're legendary relics and either in the possession of the Duke's champion or at the bottom of some ancient dungeon. Likewise, my cities don't swarm with half-fiend dire celestials or whatever.

I like to use monsters, demons, et al - I just like to have a good reason why they're there. I believe in credibly maintaining suspension of disbelief, which some people don't seem to care about - eg if the highest level spellcaster within 100 miles is 8th level, you're not going to be able to buy +5 swords on the open market. If there are any, they're legendary relics and either in the possession of the Duke's champion or at the bottom of some ancient dungeon. Likewise, my cities don't swarm with half-fiend dire celestials or whatever.
