I talk a lot about how D&D simulates experiences and how unfair situations can be fun. Maybe I talk about it too much. I bring it up so often because that's the element of D&D that's been trimmed off of it for mass consumption, leaving it somewhat neutered. But if you had never played a D&D game with me, you might be of the opinion that everything is ruled by the dice (or by my own judgement) and that's not true. There are times when I make mistakes, like giving magical items to the party that are way too f-ing powerful or giving them too much money. Solving these problems takes a little cheating because, let's face it, when something is too hard it's an opportunity for challenge but when something's too easy it becomes boring, fast.
My go-to guidebook has always been the High Level Campaigns book for AD&D. You can toughen up almost any situation if you use its advice. Foes should think intelligently, for example: well, if its well-known that your party has got their hands on a Sword of Ultimate Sharpness which can cut through stone like butter then any foeman would have it in his best interest to take that sword away or, barring that, at least attempt to destroy it.
The "balance" that's important to earlier versions of D&D isn't inter-player party balance, but rather the balance between challenge and no challenge. Too challenging is frustrating (though my group can put up with a very high level of challenge without getting frustrated because they're used to singing for their supper rather than having it handed to them, and I think the same could be said of all groups used to old school style play) while not challenging enough is incredibly boring. If you can simply stand in place and cleave through your enemies continuously until you've slaughtered armies, well... you've lost that special something (danger) that makes the game exciting to play.
So, while the DM should be the ultimate font of trust, the trust isn't always that they're "playing by the rules" but rather that they're prepared to keep the game on an even keel. If you're clever, balancing mistakes out looks just like normal play because, let's face it, people would catch wise to any party's clever tricks. Word might get out that they like to use a particular combination of tactics or that one of their party members is a huge bruiser who can never be taken down. All it takes is one smart enemy to exploit their lack of variance to make them change things up—A good charm spell will turn that bruiser into a problem rather than an asset, and anyone who knows Clausewitz knows that predictability in tactics spells defeat.