I mean, can you answer the following basic questions:
1. How many characters is a "standard" adventuring party?
There isn't one. To quite some extent, this is irrelevant to a lot of AD&D. Either the DM balances encounters based on the group, or the group balances encounters themselves - either by adventuring in less dangerous areas, or by hiring men-at-arms and henchmen.
2. What level is an encounter with 4 gargoyles an average encounter?
The answer to what Gygax considered this an average encounter can be found in the XP rules: you got full XP only for an encounter where the Hit Dice balanced (with the monster HD being adjusted by their special abilities). I don't have the DMG with me at present, but it's probably in the range of 28-32 levels balances that encounter.
However, I don't know how much Gary used that rule, nor do I really consider it a good estimation of balance. (For vanilla creatures, it's not that bad). Still, in early D&D, 1 level balances 1 Hit Die does make quite a bit of sense... insofar as balanced might mean that either side could win!
3. What level should a PC have a +2 sword?
4. How many magic items should a 7th level PC have?
Heh. I agree totally that AD&D fails to give good answers to those questions. Indeed, it's one of my chief points of contention with AD&D as written. However, I do wonder how relevant the questions are - and I wonder if there's a good answer to them.
4E, for example, uses a very prescriptive system for assigning magic items. It preserves balance, but would a +3 sword instead of a +1 sword really wreck balance that much? I doubt it.
However, if you add a set of +4 plate and a +3 shield to that sword at a low level, then you suddenly gain a problem. It's not something that can be easily ruled upon. Relying on the judgement of the DM? Yes, that's a solution that allows for the massive number of variables the rules can throw up, but for an inexperienced DM, a poor answer.
In my opinion, AD&D - and the DMG in particular - suffers from Gary assuming a more experienced brand of Dungeon Master than often was reading the book. A notable exception to this his essay on why not to use monsters as PCs, which, although it directly contradicts his statements in oD&D, shows the signs of playtest experience. When it comes to treasure, a novice DM can understand the twin traps of Killer Dungeons and Monty Haulism, but knowing what the path is that leads between them? That's very unclear from the rulebooks.
It should be noted and emphasised that the concept of balance between PCs and monsters is one that depends greatly on the group. As the challenges are selected by the DM, and can be often avoided by the players, the concept of a strict challenge level is irrelevant. (Consider when it become relevant and the style of the campaign then).
Far more important to the AD&D player is the balance between the character classes. Does that exist? Yes, although it may not be as precise as what occurs in later editions. AD&D
characters are not so balanced, with the addition of ability scores, but it should noted that even a character with (relatively) low ability scores can take advantage of the demihuman races and multiclassing to distinguish themselves from other PCs.
Thus, although one fighter might have an 18/73 strength, the other fighter with a 15 strength might choose to become an elf fighter/magic-user and gain abilities that way.
Cheers!