The biggest immediate problem is the weapon upgrades you can get. With the basic loadout, you have a silenced pistol and a silenced SMG, and about two clips for both. They aren't great weapons, especially against enemies with armour or helmets. When we got spotted, and more than three or so enemies rushed one of us, or if we were out in the open at the time, we would need to run or we would die. It was more effective to hide and distract them while your teammate could hopefully sneak around and stealth attack them from behind than to get into a firefight. This seems entirely appropriate for a stealth game. Then I bought an assault rifle.
There are lots of other, more stealthy, upgrades, but I can see them going to the same point. You start with a smoke grenade, which can cover your movement or provide a bit of protection if you get spotted and need to relocate. The first upgrade will disable enemies in the smoke, making them easy pickings, and then the second upgrade makes it knock them out. That's a pretty steep escalation of power. Suddenly, you don't even need to get close to enemies, you can just toss gas at them and walk past their snoozing bodies.
On the other hand, it's also possible to make a game where your upgrades don't really feel like they make much difference. It's easy for RPGs to fall into this trap, where your +1 strength and extra damage sounds cool, but comes around at the same time as tougher enemies with more health, ultimately maintaining the status quo. Maybe you get a new ability to stick enemies in place or set them on fire, and that's novel, but generally you're still going to have to hit them with your weapons to finish them off. I'll say this for the Splinter Cell upgrades, I definitely felt more badass after getting a few. And we were playing the stealthy missions, rather than the more combat oriented ones where you need to defend against waves of enemies, so perhaps I'll be eating my words about being unstoppable once we try those.
This has also sometimes been an issue in certain RPGs, where there are 'good' character traits and stats, worth spending your limited points on, and 'bad' ones, which are very much not. Maybe botany or alchemy sounds like a cool thing to be able to do, but in fact it serves very limited purpose, and is no use at all in combat - which, let's be honest, is often where you'll be spending a lot of your time. Or like the notorious example of Deus Ex: Human Revolution, where you could define yourself as a stealthy hacker, only to find yourself inevitably locked in a small room with a huge mini-gun toting cyborg as part of a plot mandated boss battle (I still can't believe those boss battles made it into the final game in the form they did - luckily I took some combat skills, but boy would it have been frustrating if I hadn't...)
It's hardly fair to allow someone, who has never played the game before and has no familiarity with the skills on offer or the challenges they'll be facing, to screw themselves over before they've even encountered their first giant rat. That's why it's good to see games offer default starting loadouts for those disinclined to read up on the options in advance, while retaining the option for experienced (or foolhardy) players to set up a totally custom character. In short, I don't think players should be easily able to either totally overpower or totally hobble themselves through their upgrade or development choices - unless they go out of their way or setup a custom game to do so.