Tekkit Arena Server

[Leviatharan]

I started a Tekkit SMP server with the intention of giving some of my friends an outlet against each other on fairer terms; our last two servers ended up with each player covered in Quantum Armor wielding Red Matter Katars, sitting around doing nothing but mass-producing Nukes. Nobody could kill each other, but everyone took far too much pleasure in destroying everyone else's work.

I picked up World Edit and cut out an area about 300x300 blocks across straight down through bedrock around the spawn point. I then created a 150x150x50 Bedrock fortress (no Hunger Games map, but large enough for an arena) with Team Base towers in the corners, and stamped a section of the map into "The Crucible" to give it a more natural environment on the inside. I turned off mob spawning to remove any distractions.
The finished product.

The idea is that players will spawn inside the basement of the fortress (with no items) and pick their team, whereupon I can beam them some items via Ender Chest (effectively making me the DM of sorts) and they can enter the arena to duke it out. When they die, I reset the spawn point to the roof (made of reinforced glass) so they can't rejoin the fight but can still watch.
The problem right now is that I'm not sure how to balance the item allocation system. All I know for certain right now is I want to avoid allowing explosives (especially nukes!), or practically invincible armor.

For my first test, I tried to create a point-based system: Each player gets 5 points to buy items with, each item you could want costs a certain number of points. This was almost instantly blown away upon the revelation that even simple items from the mods were either quite overpowered or completely worthless, and eliminating them from the lists was no better than not having the mods at all (which was unfortunate, since I was using them for non-flammable decoration). The Ring of Ignition didn't require fuel to ignite half the map, Swiftwolf's Rending Gale wouldn't even throw players, the Void Ring and Ring of Arcana made one far too mobile for such a small arena, Nano Armor was too useless unless offered as a set (where it became too powerful) and don't get me started on any other IndustrialCraft items... Suffice to say, the idea was scrapped.

My newest idea is to allow selection of pre-set item collections; classes, if you will. Perhaps a warrior class with Iron/Diamond armor and a heavy sword enchanted with Knockback? A mage class with Potions of Harming and Ender Pearls? Perhaps a rogue class of some sort with a crossbow and flame-inducing athame (considering the lack of unlimited poisons)? A support class with healing and buff potions? The problem remains item distribution in this case, considering I already feel that some classes (ie the mage and healer) feel weaker than others in practice than they would conceptually. (I won't even begin to correlate it to MMO balance.)

So, for the purposes of this thread, I ask what you think would be a balanced but systematically diverse method of distributing items on this PVP server. Any ideas?