I've played these games for years on just the default difficulty, where the damage is 1:1, and the fights aren't interminable. My practice with the earlier games was to create custom classes and play them "straight," avoiding skills that weren't part of the "class." That way, I can play a variety of different characters, in different ways. I don't like getting into a rut of "this is how I always..."
I find Skyrim's combat easier than the previous games, for most character types, so bumping it up one notch to Expert seems to put the game on a par with what I was used to in Morrowind and Oblivion. Master isn't awful, but I have a harder time keeping a character alive (yes, I know that's the point, but... )
To get back to topic, I'd say that one way to not OP the bow is to indeed turn up the difficulty setting. If a sneak attack is one-hit killing every enemy, the game is too easy. I like to see a sneak attack be 100% fatal on the lowest of whatever you're facing, but it shouldn't take down a boss's health to the point where he can't counterattack. And I don't like using Paralysis poisons on any except the most impossible bosses, because it's a cheesy "I win" button. I feel the same about stagger-locking enemies with dual-cast destruction; it's cheesy.