I play on a 32-player server exclusively. It's not uncommon to see up to 4, 5, maybe even 6 engineers on some rounds. And it's fast respawn!
The sentries still aren't overpowered. Get a couple decent demomen and you can absolutely destroy their entire defense that way.
Having more players forces you to be more team-oriented. If you run in there like an idiot, you will die, and you will die quickly. But if you push together, it becomes a nearly unstoppable force.
As for snipers, if you can't figure out how to stop a sniper, you need to play more. Soldiers, Demomen, Scouts, they all can get right in the face of a sniper even on 2fort. In other places, Spies can absolutely dominate the sniper and get away scott free, as they're typically away from any teammates that could get revenge. Pyros can toss a flare gun shot right at a sniper from any range. Even if it doesn't kill the sniper, it puts him effectively out of commission until he either gets health or stops burning. Snipers also have to pace their shots if they want to get an instant kill.
There's a lot that snipers have to put up with.