I take it you weren't keen on 1e's ring of invisibility either?
1e is a whole different beast than 3e when it comes to magic items. 1e magic items were priced according to the percieved utility of the item, and because Enchant Item and Permenance were so high level (to say nothing of Wish, which was implied to also be a common requirement), they were generally nigh impossible to manufacture. The practice of making magic items freely available for purchase was highly looked down upon, and so if you found something it was usually off a random table or becaues the DM placed it. In either case, it was only there if the DM was willing to accept the results of having a ring of invisibility in his game. Magic items were considered the exclusive territory of the DM, and so much a perusing the DMG when you weren't the one running a campaign was considered bad form.
3e is different in every regard. PC's are empowered to create their own items and can do so easily at low levels using readily available commodities (feats, spells, XP, and gold) rather than an unknown or even unknowable list of random hard to obtain items combined with spells which required major sacrifices to cast and were generally not obtained at the usual levels of play anyway. Many campaigns readily accept the notion that gold is freely tradable for any item of the player's choice, and PC's generally have the equipment that they want when they want it and even plan out what equipment that they plan to have at a given level.
There are numerous problems with both models in my opinion, but the biggest single problem with the 3e model is that is 'one size fits all' system for pricing magic items does not in any fashion take into account the actual utility of the item. For a game that prides itself on balance in a way that 1e did not this is an amazing oversight. In fact, I would go so far as to say that the 3e item creation rules are the least balanced and most abusable part of the system, which makes it amazing to me that they escaped as much scrutiny as they did. A 3e ring of invisibility is priced as a relatively minor item. This suggests all sorts of major problems with the system.
How about the 1e invisibility spell?
One of the single most abused spells in the games history and one of the most frequent complaints about the 1e system, not only by me but by players generally. The biggest problem here is the 1e version of the spell had unlimited duration. So long as you didn't attack, it was permenent. And as a 2nd level spell, it came up almost immediately in a way that much of the brokenness of the game never did. What made the problem even worse is that 1e didn't have a well thought out system for dealing with invisibility the way 3e does. There was no concept like 3e's 'Scent' ability, and the table for detecting an invisible foe wasn't really easily integrated with 1e's concept of attributeless monsters.
I can see what you're saying, but one area where I disagreed with the 3.5 revision was turning the invisibility spell from a spell with some good non-combat utility into a short duration combat spell.
I'm notorious as a 1e thief/M-U. I know all about the 'non-combat utility' of invisibility, and while I'm not completely happy with the 3e implementation, I know exactly and from personal experience why it is that way.