Things I've used to balance magic versus technology without magic:
1. Cost controls
. Yora hit this on the head. Magic can be a very expensive way to solve a tech problem.
2. Technology has specifications and interchangable elements; magic doesn't (or has less)
. Take the image of the water wheel versus the magicked wheel that doesn't need a water source. Where's the off switch? If a part wears down, does replacing it affect the enchantment? The corollary of this that magic is difficult perceive the mechanisms of, and thus difficult to alter by anyone other than the creator, whereas tech involves understood principles and the skillset is broadly held. If magic goes wrong, things get complicated. Magic does get same results for same spells, but there's all sorts of complications with caster levels and Spellcraft checks (in-universe, enchantments are best understood by their maker) to comprehend someone else's work.
3. Magic cannot, by fiat, replicate craftsmanship
. This is something that came to me a while back, as I've learned more about carpentry and metal work: one of the giant cop-outs in magic is that mages can create functional objects without any understanding of what they've made. Whether you're talking about a wrench, a stone wall, or a table...there's a method of crafting that objects that has an internal logic and requires special knowledge of what constitutes a well-made one versus a poorly-made one. This logic makes magic less utilitarian...unless you've got a mage with both the knowledge and the power, they can't supplant mechanical labor entirely.
4. Magic makes for a fragile infrastructure
. I guess this is a corollary of (2), but magic doesn't have tolerances like technology. Dispelling and disjunction, anti-magic fields--all of the above mean catastrophic failure--anything that disrupts magic is a huge threat is a society where vital systems are regulated by magical devices.
5. Specific to warfare and spell use: magic spectacularly increases casualties and change the shape of military actions
. If you're at all familiar with the period between the US Civil War and World War 1...that's what a battlefield would be like in a fantasy setting that has D&D weapons technology and spell-casting. Fireballs
(radius spread attack) and Lightning Bolts
(uninterrupted line attack) are the doom of open-field formation tactics. At some point, magic-as-ordinance is going to come under examination as part of the ethics of war--think, the Geneva Convention ban on incendiaries and dumdum bullets.
None of the above means magic shouldn't ever have a role as tech.
- Cost will always be modulated by urgency of need and lack of alternatives. A decanter of endless water will have a different infrastructure value in a desert city than a temperate one. A corollary of this is the availability of materials for mechanical construction (metal, wood, stone) versus the material components for complex spells. Under conditions where the former are scarce, the latter may be expensive but nonetheless the better option.
- Magic does have the advantage of allowing circumvention of the inherent "tree" structure of tech. For example, society without pulleys and winches using Tenser's disks to achieve the same weight-transport needs. A corollary of this is that magic will sometimes circumvent a situational limitation of an other useful technology. For example, simple wheel-based freight is only useful where there's roads and no need to traverse steep inclines; a Tenser's disk may not be able to haul as much as an ox cart, but in can do so regardless of terrain issues.
- The single biggest, society-changing form of "magitech" is any form of healing/disease removal. Given the pseudo-feudal, semi-industrialized structure of most fantasy societies, maintenance of a healthy labor force would be a major plus...as would healthy, not-dying-of-childbirth women.