Glass Cannon refers to characters built this way (usually deliberately) - extremely powerful offense, but very fragile defense in comparison. While they can deal exceptional amounts of damage and take out enemies in only a few hits, even normal enemies can do the same thing to them. Wizard archetypes often fall into this ideology.
Power Creep refers to a general increase in power in the campaign - all the new stuff the characters have found has pushed the strength of the characters to much higher levels, making the old challenges trivial. This generally deals with the overall power of a setting, where enemies advance at approximately the same pace to maintain the challenge for the heroes.
Monty Haul might be another term for it - the PC's are getting much more "reward" than the system was balanced to expect, artificially inflating their power in relation to their character levels. In nearly any game system, Equipment = Power, so more powerful equipment means more powerful.. uh.. power. -ahem-
The answers to this question briefly go into some of the consequences of ignoring the Wealth-by-level guidelines. Obviously, the question is targeted towards D&D 3.5e, but even if you are using a different system the general principles will remain the same.
Equipment is the simplest to deal with, by simply tossing it into a (literal or figurative) fire, and disposing of it.
Lucky rolls are just luck. Players shouldn't be nerfed just because they are lucky - it will turn on them eventually.
Optimization could be the most difficult to deal with, however optimizing one area often comes at the expense of other areas. Nobody can be good at everything.
Of course, before even trying to fix this "problem", discuss it with your players and find out if it's even a problem in their minds. If they are happy with the gameplay as it is and are enjoying trusting their lives to the fickle winds of fate, then there really isn't a problem. Some players will actually find a setup like this to add more thrill to each encounter, when any kind of slip-up might be their last.