I don't think "balanced" is the first thing that comes to mind when I think about the Magic system in this game. It has some interesting things many people already mentioned, such as being one more factor in making two characters from the same class feel different; unique spell lists are definitly a compeling feature, although I would like to see one or two very limited availability tomes that can teach a character a spell they don't naturally know. But even this particular feature of individual spell lists, outside of the majorly unique attack spells (Thoron, Bolting, Meteor, Luna, Dark Spikes, Banshee), is very, very underutilized.
Thanks to the inexistance of a weapon triangle and magic triangle, there is never a scenario where I think "Well, maybe I should use Lorenz here to cast Fire-related Spells instead of Lysithea casting Dark-related spells". Since mages are mostly slow, there is rarely a situation where you think "Thank god Annette has very light weigth wind spells, she is the queen of doubling!". Outside of spells with unique utility or range, you just cycle through them with X/Y looking for the best damage and chance to hit, and confirm. If I asked you right now what the difference is between Ragnarok and Fire, would you be able to say it outside of some Might and some Weight? And it really is only that. More often than not, the difference between two spells is just some might and some weigth. Rarely, some crit. You could argue that's also true for weapons, but weapons utilize weigth, might, durability, crit chances, vulnerabilities and combat arts better in making each of them more unique, not to mention many enemies try to emulate the existance of a weapon triangle by often having Breaker Abilities equiped; which you can utilize, as well (But I, quite frankly, almost never do).
The above is the reason why I enjoy Hapi so much since she's been released - she's a damaging mage that has Banshee, which is mini-Encloser on a high damage and higher than average range spell, and also doubles as a monster shield breaker from far away thanks to all the magic range modifier we have available.
If the common, "do damage" spell had more usages, and mages had far more utility spells in offensive arsenal, I think the system would be more interesting. Lysithea, a mage that OTK units even in Maddening, happens to also have a Speed debuff damage spell, which ends as completly useless for it's debuff part. I guess part of it is actually requiring you to use stuff like debuffs, poison, other tools other than one rounding enemies. Being able to customize the number of spells for certain spells is also something I'd really like to be expanded on - the suggestion here was to have an equippable "x2 White Magic" uses, which I would love. I once made a Holy Knight Nosferatu Byleth build which completly sucked in Maddening because I wanted a Nosferatu tank like Linoan was for me in Thracia; in Three houses, he would just go out of spell uses and be a sitting duck. It completly limited by capability to customize, which annoyed me to no end.
And speaking of utility spells and Warp skipping, which was already mentioned here, I think the system in 3H is better for creating maps that better take Rescue/Warp into consideration (even if 3H itself doesn't). Since you have a limited amount of these spells uses per map, the devs can actually tailor the maps with these in mind;. when they are staves you use to different effects only a couple of times in the game for particular situations, they can never know how many you will have for a particular map, and can't balance it accordingly. Imagine if they balance a late game map, for instance, exclusively on the the player having X warps, yet the player has spent all his uses; or the other way around, and they balance a map on having few uses, yet they player held these staves all game and uses more charges of these than the devs intended and/or considered. By knowing "The player will have X to Y warps, based on his group composition and chapter in the game", they can actually make maps that require some warp uses as part of your arsenal to tackle the challenge at hand, and not merely as a "skip"...So in this sense, I hope they continue to build in this system instead of scrapping it for another.