I like Ksbsnowowl's "rare" magic idea. If you use the standard loot and wealth by level guidelines with no class restriction, the PCs end up feeling like superheroes. Most "normal" people are noncasters and NPCs, but most of your adventures pit you against magic-using baddies. This seems to be the avenue most low-magic settings do.
We get the idea of low-magic in our games as ones where players don't get good equipment or play clerics and wizards. It actually seems like most low-magic settings are low-magic, but not for the PCs or bad guys. I think we need a better definition of low-magic games considering that the popular settings and game mechanics are often at a disconnect.
Examples:
1: Monster hunters in 3rd edition Ravenloft could access secret organizations dedicated to protecting humanity, many of them containing wizards, paladins, and supernatural heroes (albeit low-mid-level). There are wizard colleges around, but they're one-of-a-kind isolated places. Most dudes are commoners who can't really defend themselves, and the nobility's either evil or incompetent. A PC Druid most likely belonged to an order that's a big power play in a certain nation, while the PC Wizard probably studied at a famed university.
2: In the Dragonlance adventure paths, you can get access to magical items and spell laboratories if your wizard character joins the Tower of High Sorcery, and some churches have extensive networks of clerics. The Dragon Empire (the Big Bad Guys of the setting) were for all intents and purposes a high-magic society. Most of the good and neutral nations were suffered from peasant uprisings, poverty, and distrust of both arcane and divine spellcasters; the Gods of Evil were the only deities who didn't leave the world; and the Wizards are all cloistered in a single Tower cut off from the world. The Dragon Empire had an army of evil Clerics, magical defenses, flying fortress, and weren't averse to adding monsters and chromatic dragons to their ranks. Heck, the party Cleric of a non-evil deity was expected to be the first of the "returned" generation!
Idea: what if we allowed the PCs in low-magic settings to have standard wealth by level and unrestricted access to full-casting core classes? Magic item shops in every town would be replaced by powerful one-of-a-kind beneficiaries with a vested interest in major world events, like monster hunters in Ravenloft or the last remaining conclave of Wizards in Dragonlance. The bad guys would be more powerful than the forces of good due to evil pacts and stuff, and thus function as though they were in the "normal magic" range in regards to encounter treasure.
It may not be what we think of low magic, but this can be explained by "PCs are special." Most peasants will never see a potion of jump or a +1 flaming sword, but the PCs go to the regions of the world where all the interesting stuff is happening. And if the PCs fail, well then there's nothing protecting those commoners and aristocrats from the Necromancer's army of shadows or the Dragon Empire's invasion.