I started this in another thread, but thought it deserved it's own post in the Dev discussion.
I believe PrEs drop the ball in 2 general areas. Qualifications for Entry and Class versus Role.
1. Qualifications for Entry
D&D Prestige Classes rarely (if ever) require X levels of Y base class. This could only have been a very intentional design. Instead, they required BAB, skills, feats, and/or generic "spellcasting" of a type. As such, it didn't matter how you got into the prestige classes because there were no class requirements.
So, for most melee/tank-oriented PrCs, you need a certain BAB score and certain feats. Barbarians, Rangers, Fighters, and Paladins were all viable options to get to most melee type prestige classes. Once you were in the Prestige Class, things looked relatively equal. You ceased to level in your specific base class but became more like the eventual result of the Prestige Class. The point being that it didn't matter what base class you started off in. You could even start as a Cleric, Rogue, or Wizard and eventually qualify.
This leads into problem number 2. Class versus Role.
2. Class versus Role
D&D prestige classes were all about the Role and function, not the class itself. There are many PrCs that don't translate to PrEs very well because you simply can't tie them to a class - they're tied to a ROLE. Take Eldritch Knight for example. What's the role? An arcane spell slinging melee type. Spell Slinging? Does that mean Wizard, Sorcerer, or Bard? Does melee mean Fighter, Ranger, Barbarian, or Paladin? The answer is yes - it can mean all of those. Another is the Sacred Fist. Divine spellcasting on a fist-fighting melee. Monk by definition? Absolutely not. A monk/cleric would qualify, as would a pure class Druid, Ranger or Paladin that took the right feats. It's completely impossible to peg many PrCs to a specific Class even though the Role is very well defined.
DDO has, in effect, pegged Roles TO Classes with the Prestige Enhancement System. Specifically, viable fighting types. If you want to fight, you're a Ranger/Fighter/Barbarian/Paladin, and even the Paladin in that group is highly suspect. D&D made no such requirements or pegs. Anybody was a viable melee combatant if built properly (feats, PrCs, equipment, etc).
The biggest losers here are hyrbrid builds. And by that, I mean anything that typically does X, but is capable of doing Y very very well. Because Turbine has chosen to only implement PrEs that offer a 1 (or sometimes 2) dimentional aspect of a base class, anything not conforming to Turbine's preconieved notions of what that class is meant to do is essentially non-viable in endgame scenarios.
Earlier (up to level 9 or 10) in the leveling cycle, these non-standard builds work fairly well as the gap between different classes isn't nearly as noticable. Same is true for PnP. However, in PnP you can actually pick up the Prestige Class made for your Role. In DDO, you're stuck to a base class or two, with little chance of ever being able to fullfill that desired Roll.
So, what to do to fix it...
1) Prestige Enhancements need to be less tied to the base classes. Make the requirements for taking them steeper if need be, but there's no reason a Fighter shouldn't be allowed to go Tempest, and no reason a Ranger shouldn't be allowed to go Kensai. In a lot of ways, this was already partially done for Arcane Archer (all Elves can take it) and the Defender (all dwarves can take it) prestige Enhancements, but my point is that if you take the right feats or invest in the right skills and stats, all Prestige Enhancements should be open to all characters if the have the appropriate feats and abilities. This was how it was done in PnP and how it should be done in DDO.
2) Since all PrEs would then fall under the same category, limit us to 2 or 3 of them per character (heck, 2 for non-humans and 3 for humans would work too). Right now, you can only take 1 class specialty for each base class you have trained. Obviously, if PrEs aren't tied to the classes there needs to be some other way to restrict how many you take. Fix it at 2 or 3. Or 1 for that matter, as long as all PrEs are available to all characters. Heck, if some combos are game breaking, have those specific PrEs be exclusive to one another. So, if you were a melee, for example, anybody with TWF could take Tempest. After all, that's what the original prestige class was all about, right? Tempest was all about TWF and has little or nothing to do with being a Ranger.
3) The problem so far is that there's little incentive to stay pure class. That's also a problem in P&P - there's rarely ever an incentive to stay pure class. So, make pure-class-only enhancements. For example, make an enhancement only available to pure class clerics that gives a stacking +2% healing per level that stacks with the traditional Cleric Life Magic. A pure Fighter enhancement for "+1 attack". A pure Wizard enhancement of "+10 SP/level". You get the picture. It's just extra incentive to stay pure class, making it cost them more than the "1 level" they lose from their primary class.
So what's the benefit? Well, the biggest benefit, really, is MORE CHOICES. More ways to build a TWF monster if that's your thing. More ways to actually specialize that wizard than the base wizard/sorc enhancements. More ways to build that defensive behomoth you've always wanted to. More things to do with that old gimp character of yours that doesn't qualify for the current PrEs because of class level splits or something.
The other benefit that comes to mind is that it allows for easier addition of PrEs down the road. You don't have to tie them to base classes and say "hey look, this PrE is for Rogues, so we need to balance that with another for Paladins", etc. If that 15/1 fighter/wizard wants to take a PrE that lets him cast spells better, fine, so be it. There's nothing stopping him from doing it in PnP, and nothing stopping them from making whatever build they want to.