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It seems to me that it must be an exceedingly odd campaign world where all magic items are in the hands of evil villains. Somebody had to create the magic items in the first place, why would this ability/technology suddenly disappear? How come nobody can make or sell it now? Moreover, why do only BBEG have them? Is it a prerequisite that you have to be evil to create magic items? And, if all the magic items are in the hands of BBEG, then what stops them from simply destroying all good/civilization/whatever they want? I mean a few underpowered heroes certainly wouldn’t be able to stem the tide if all the bad guys have magic items and nobody else does. Just seems strange to me.
Besides being strange/odd, it is unbalancing. I mean good tactics and well made characters can compensate a lot, but after a few levels they get underpowered. If this is what the GM is intending and is knowledgeable/capable enough to balance that, than it can be ok. Or, maybe it is just a “Brutal” type game with lots of PC death, but the players should know/accept that upfront. Moreover, this can be seriously limiting for players that create characters with an end goal in mind. Don’t ever take weapon focus or exotic proficiency cause who the heck knows what will drop. Forget the critical focus chain because you likely won’t find a weapon with a high crit range. Think long and hard about playing a wizard because you will have to rely on getting lucky as far as spells outside of your two when you level. This could seriously limit your utility.
In my current campaign the DM is of a similar mind to those posting above. I made the mistake of choosing to use an archetype to build a polearm user. So now I am running around and whacking things with a quarterstaff because apparently nobody makes polearms, you can’t buy a polearm, you can’t trade for a polearm, I certainly can’t craft a polearm, and no BBEG has deemed it worthwhile weapon to use a polearm. Ohh and my starting polearm got magically warped. How does this make any sense? Is it really more fun this way? More fun for whom?