All this hard work for WHAT?

As others have stated, the magical items really start to flow once you get to Severed Hand. At 4th to 6th level (around where you should be at Dragon's Eye) you should not have that many magical items. I know many pen and paper DM's like to give these items out like candy, however, A) I don't think its appropriate for characters of this level to have kick-ass magical items (like artifacts) and B) It leaves characters spoiled when they do play a game (like IWD) that is more "reasonable" and doesn't freely give out powerful magic items to low to mid-level characters. The items you will get later are ample and more appropriate to characters of higher level. Also, if used properly, the Boots of Speed are a powerful and useful magical item. They are great for tying up enemy archers with one party member while the rest of the party focusses on other tasks. Consider the work you've done at Dragon's Eye as a down payment on the stuff you get later.

It also makes sense in terms of the plot that there are many magical items (weapons and armor) in Severed Hand. The alliance of elves and dwarfs produced many such magical items for the war with the orcs. It's reasonable that some of them are still in Severed Hand.

Earlier areas in the game don't have such justifications for magical items, except a few specific places.

None of this really matters much. It just means the game is well designed in this way.