Further, I expect that Caelic is grossly over-stating how fantastic this fantasy world is.
If this were a Conan novel, I'd concede your point. If it were a low-fantasy game, or even a heroic fantasy game, I would concede your point.
It's not. D&D 3.5 is about as far into high fantasy as you can GET without crossing the line into outright superheroic fantasy (and when optimized, it frequently does.)
We're not talking about how rare you think magic should be, or how rare I think magic should be: we're talking about how rare magic is according to the default game. We can houserule it all we like, but we can't then turn around and say "This is how rare magic is in D&D."
In D&D 3.5, magic is common. In any town of hamlet size or larger, magic is likely available, according to the rules. Not BIG magic, true--things like Eternal Torches--but magic.
Furthermore, again according to the rules, any town of any size is going to have spellcasters. They may be low level, but they're going to be there. The example is a hamlet of two hundred people--which has a population of 7 spellcasters.
In a large city, AT A MINIMUM, there are going to be:
15 wizards (one of 10th level, two of fifth level, four of second level, and eight of first level)
15 clerics (one of 10th, two of fifth, four of second, eight of first)
15 druids
...and so on. This isn't even counting the adepts (of whom there should be 60, according to the rules.)
And that's in a city of 12,000, and that's the worst-case scenario. If the dice come up with a number higher than 1, there'll be more than that. Bump it up to a metropolis, and you're going to have SIGNIFICANTLY more.
It would be far more cost-effective than building a giant dome, especially considering how limited the engineering capabilities of the era are.
And those engineering capabilities are limited...why, exactly? In a world with dwarven stonecraft, functional perpetual motion engines, outright transmutation of matter, teleportation, magical levitation, and the countless other physics-defying resources at their disposal? No, they're not commonly available to peasants, but we're not TALKING about peasants.
It's interesting that you reference "the era." Not "the world," but "the era." It implies that we're talking about a specific historical period...which, of course, we're not. We're talking about a fantasy world that happens to conform to medieval Europe in a lot of ways. It conforms to medieval Europe because...well, just because. Because the original game was based on heroic fantasy which in turn was based on knightly romances set in medieval Europe.
Likewise, nobody would take into account high-level spells like Earthquake in basic city design, unless high-level spellcasters are just that common (like in Silverymoon, Myth Drannor, Sigil, etc.).
...or just about anywhere else in the Realms, going by the source material. And what about, y'know, ACTUAL earthquakes? They do happen sometimes.
So yeah, when building these cities, these people almost certainly don't even know that there are Wizards powerful enough to burn down entire cities as a free action every turn.
Are you seriously attempting to argue that in a world with earth-shaking wizards and dragons, the majority of the population is unaware that they exist? That the typical peasant in the Forgotten Realms doesn't know there's magic out there? The typical citizen of Greyhawk?
I think that's stretching suspension of disbelief WAY past the breaking point in an attempt to preserve the "The world would still look like medieval Europe!" conceit--and it's NOT the default assumption around which D&D 3.5 is built.
(Then, of course, there's the fact that this entire discussion is about a town that needs more defense precisely
because a powerful wizard came zipping down and blew it up.)
