Part of the problem is that leveling from 1 to 50 is quick, and easy, to the point that you need not worry about equipment. So much in fact that knowing this, you will not bother worrying about equipment until level 50.

At level 50, there is not much else to worry about BUT equipment (the only thing left to enhance). In other words:

1 -> 50: Only concern is XP
50 : Only concern is equipment

And this is where the balance issue comes. With only a 'single' thing to really focus on, you do end up focusing only on that. If it were diversified more:
1 -> 50: XP + Equipment (can only go from 30 - 35 with good equipment, 35 - 40 with better, and so on).
50: Equipment + Story Unlocks? + Something?

This would encourage us to vary our time on different tasks: Today I will level, or get some better equipment, or work on some story, or 'something'.