@Caruga: read the quote you quoted again! 'will cast MANY level 1 spells with the exact same potency...'! And the point is past a certain level, spellcaster level doesn't make a difference, and in many cases level doesnt make a difference at all.
@TurboTT: you're not right TurboTT. Wizards are already God-like! But the reason for that is certain combinations of higher level spells and items can be incredible (Robe of vecna+improved alacrity+timestop =you can cast nearly every spell in your spellbook!).
Putting the fact that intelligence is useless aside for a moment, I think the real issue here is not to do necessarily with the power of a wizard, but the fact that later in the game a great number of the spells (particularly lower level) become pointless.
Increasing the effectiveness of lower level spells would not actually make wizards more powerful, because they will still be mainly casting their super-spells. However it does increase the range of tactical consideration, in some situations a lower level spell might actually be useful, it also makes enemy lower level wizards more dangerous if lower level spells can be a bit more potent.
However, I think the way of rebalancing this is not simply to go through all of the lower level spells and change them/adjust them so they become more powerful with levels (although that is one way), but to use what is already there, and perhaps even kill two birds with one stone...
What I suggest is that wizard specializations, e.g. enchanter, diviner, necromancer etc, should not just give one extra spell per level (perhaps even remove this!!! -or not) but instead, like other kit classes get improvements to how their spells work as they level up.
That way you can kill many many birds with one stone (although I appreciate this would be a fairly substantial change).
Firstly, the improvements would be limited to the spells of that specialization, that way you can prevent all of the spells from becoming too poweful. I.e. A diviner as they level up will get bonuses to divination spells.
Secondly, this has the added effect of fixing one of the intrinsic problems with specializations, namely that some specializations are incredibly bad (like the invoker and diviner). This is because the bonuses to their specialist spells will have more of a compensatory effect. Worse specialisations can get better improvements.
Taking then for example, a necromancer. We all know there are certain necromancy low level spells which are really awful, like chill touch and ghoul touch. You might have something like, at level 6 Necromancers can cast 'touch' spells, like chill touch, at range.
Or, you may have it that when they cast vampiric touch, chill touch will be cast automatically, provided it has been memorised (both spells then get cast simultaneously).
Similarly we all know that spells like monster summoning 1 become absolutely useless later in the game (mainly because it would be insane to waste the summoning limit), so a conjurer at level 8, may for example be able to cast monster summoing 1 without the summons adding to the summoning limit etc
I hope that you can see that by these means, not only can you give specialist wizards more character, but you can also help to keep lower level spells useful. Of course the level of the bonuses should be kept reasonable, in a similar kind of vein to the examples above.