No, it doesn't. If they replaced the wizard in the core rules with the domain wizard, that would be such an admission. But giving an optional class variant in a non-core book only suggests that some people might find it more suited to the game they want to run.
It is important to remember that the fine details of balance are campaign dependant, and it is thus reasonable to give some optional variants of lesser and greater power to help DMs cover imbalances they create themselves.
As an example - If your game covers a great many different elements, you might find specialists well-balanced with normal wizards. But if your game focuses strongly on one thing (like combat) you might find some well-constructed specialists have a leg up on their non-specialized brethren, since in a more focused game, the player can expect to do with a narrower range of available spells. The Domain wizard might then even the scales a bit.