OGB if you are willing to concede that it is purely a question of game balance, then I have won this argument. We then move on to an entirely separate debate, which is:- would a wizard in heavy armour with full spells be overpowered in a D&D 3.5 variant?
Right, veering off topic totally now...
The answer is:- compare them to clerics, who can wear full armour and use full spells. Plainly, compared to the cleric, the wizard is NOT overpowered!
Now, suppose we delete or at least massively de-power clerics as the monstrous abominable and horrific game design mistake that they were. And druids, for good measure.
Where does that leave wizards/sorcerers?
They have an important slot to fill, no doubt about it, once clerics and druids are thoroughly nerfed. But is a 35% spellcasting penalty EVER worth the benefit of increased AC? I have to say that I doubt it ever can be - because getting your spell to work at that critical juncture is life or death to the party, and a 35% failure chance is NEVER acceptable.
A 5% failure chance perhaps, or a 5% chance of something going seriously wrong.
But if it's just game-balance you want, why not go with the armoured wizards with reduced spell slots option instead. And 0% failure chance.
BUT the reason I would NOT play an armoured wizard with reduced spell slots in D&D 3.5 is that clerics are already super-powered compared to wizards. If you reduce wizards' spell slots and all you give them in return is a benefit that clerics already have (armour), wizards have NOTHING unique to offer the party.
Do you see where this leaves me? I do not generally like playing mundane characters - fighters, rangers, rogues. Bards can be a bit freaky. Paladins are OK from time to time but they're not exactly ME. Druids, likewise. Positive plane-aligned clerics I hate with a passion. Wizards and sorcerers I am sick to death of playing under D&D 3.5 rules because clerics are so BLATANTLY better than them. Which means that the only class I can play is a negative plane-aligned cleric. And then the party criticises me for following my faith and not healing them - AND THE DM JOINS IN!!! So, I am left with no options. The splat books do not help because armoured wizards are vastly underpowered compared to clerics. So that leaves NOTHING in D&D 3.5 for me to play. Not a single character class. Well, paladins and druids maybe, but their novelty value for me wears off very quickly.