Psionic Power augmentations are a little frustrating. They prevent low level powers from becoming obsolete but they allow the Psionicist to spend power points very quickly for dramatic results. The result is a character who can be very dangerous over the short term - and in D&D who cares about the long term anyway - one sleep and you're back to full. Just dodge encounters until then. - That is the probably I think you're encountering.
The solution isn't to hinder the augmentations. It's not a bad solution, but it can be very frustrating for the players. The better solution is to throw many encounters at the party within a single day. The psion who quickly expends all his power points will find himself a unglorified warrior near the end of the day.
If one power is becoming a problem in particular, you may wish to discuss and limit it. I have found that Vigor, at higher levels, is hideously broken because the bonus hit points come off first. Making them come off last fixes the power instantly, otherwise you need to limit the augmentation. I saw a 10th level psion use Vigor to absorb over 100 points of damage without losing any of his "real" hit points. (Cough it was my character).
If a psionicist is willing to burn the extra power points, I think he should be rewarded with a greater chance for success. As the DM you need to punish him by having more encounters/day.
Try not to opt for the "they won't get sleep" trick. The 3.5 rules make it almost impossible. For every interuption the characters need only 1 more hour of sleep. Eight encounters a night gets a little silly. Five tough encounters in a single day is beleiveable.
Also using stat damaging creatures, psionic draining opponents and opponents with high saving throws or anti-magic or illusions to waste powers on, can whittle down the psions.
Mark Charke