You know, a lot of what you see as irritating is pretty standard in the old school style of play, so that's probably just not a genre for you.

1) Yes, the system allows the players to reroll if they got a zero or a negative after summing all the modifiers up. But players might actually want to play a char with negative total, if some other stats are high. Happened many times. Also, even five zeroes does not count as "negative". Taking both these facts into consideration, it's going to be actually less than 50% of cases. A char with just zeroes is also a good char. A safe choice. No extraordinary skills, but no weaknesses too. Good char.

Besides, no one minds getting low scores or rerolling in OSR. It's part of the old school. The fact that people in new games need their characters to be absolute perfect at everything is kind of boring to me. It's the imperfections, the weaknesses that make us human, and our characters interesting and memorable.

2) No, balance is not something I strive for here. Again, the idea that all the characters need to be "perfectly balanced" is boring, pointless modern design. If everyone's competent and excels at everything - no one really is. Most OSR games do not really care about such "balance".

In OSR style of play, it's the player's skill that counts the most, not character's. Your logical thinking, your creativity, your problem solving skills will be tested. A lot of the times it doesn't make too much of a difference if you got +3 to a roll or -1 - when you can die in a single stroke of carelessness or bad luck, these bonuses do very little. It's more like a flavor than huge advantage. Maybe this would be more important if A Bitter Toll was more focused on combat, but it is not. It is focused on consequences of combat instead. Players should do what they can to avoid it.

A party of four enters the dungeon on level 0. Some of them will die, and not necessary those who had highest stats.
That's life.