I had the same outcome. Monster strength balloons faster than the adventurers progress. Part of it is because the majority of classes are useless. Change as many as possible to knights and archers for better results.
I suspect part of it is due to the hangup between two and three stars: too much time passes while trying to meet the income requirement, as a result everything ends up underleveled. Kairosoft would ideally adjust the goal to 20,000-23,000, but unfortunately they rarely update their games.
Thirdly, characters seem to stop buying their own equipment shortly after the game begins. Upon completion, the weapon, armor, and accessories shops seem to be the least frequented stores out of everything. You have to supply pretty much everything for them out of your own pocket.