This touches on the age old design questions of why is magic more powerful than fighting.
Consider that normally, folks complain that wizards outshine fighters at high levels, therefore wizards must be relatively unlimited in their resources at high levels ALREADY.
It'd be nice if every class had a damage out put that increased with level.
Rogues do (sneak attack)
Clerics do (higher level spells)
Wizards do (higher level spells)
Fighters do (more attacks, better than other classes attacks)
Monks do (bigger damage die)
The question is then, are these damage increases COMPARABLE, such that balance is maintained. At first level, I could care less if a wizard had an infinite supply of Magic Missiles, because 1d4+1 auto-hit isn't much better than 1d8 arrows being shot by a skilled archer. At higher levels, straight attacks can't keep up with 10d6 fireballs however.
Conceptually, you'd want progression method that kept all classes sort of scaled to each other in damage output for each level (the exception being for classes that specifically trade off damage for increases in other aspects). If you could do this fairly, then you could easily justify wizards having infinite output with spells.
Another aspect to consider (and someone touched on it) is the nature of healing. Continual healing output would probably skew the game, look at console RPGs, where you can keep drinking potions while fighting, therefore never dying against the BBEG. One thing I'd suggest is to model healing closer to real life. A smart author once wrote, "The act of destruction is far swifter than the act of creation". So why is it that D&D treats healing and hurting as mirrors of each other. Logically, healing should be harder and slower. If you modeled this realistically (at least symbolically), your most common reason for regrouping and recouping would be to rest and recover HP, nobody would run out of damage dealing ability, they'd simply run out of HP. This would in turn justify wizards higher damage factor (because they are easier to hurt and have fewer HP, so they have to recover sooner (thereby reducing the total damage they can deliver).
Janx