I believe it had. Say what you want of it now (and it seems to be unpopular with current historians?) , but for diplomats living and acting during that time, during the whole century of (near-constant) peace between the Great Powers in the period 1815 - 1914, the notion of "balance of power" between the Great Powers of Europe was present and weighted heavily in their actions. It want new to their era, of course, but the division of Europe between great powers and others, where the great powers could and should "intervene" to "keep order", presupposed the maintenance of a balance of power when these interventions were carried out, and diplomatic consultations to that purpose.
A-H overstepped the bounds of this system when it issued the ultimatum to Serbia. Previous crisis impacting on areas that affected several great powers were resolved through conferences. They could have convened a conference to deal with the issue. Among the other monarchs (and even republican France had a problem with assassination) the issue of the assassination of the heir could be addressed. But the austrians feared that such a convention would actually tackle the problems in the Balkans that were being caused in part by A-H expansionism, so they instead opted for seizing the opportunity to act unilaterally, and were backed by the germans. The rest is history.
What really made the war a world affair was the German backing to Austria. A-H swallowed Bosnia when it was already unstable, thus becoming an impossible empire. The best action by an international congress to deal with the Balkans issue would have been to strip Bosnia out of Hungary. Hand it over to the serbs and let them deal with that mess! Austria would gain stability, while its uppity challenger in the Balkans would probably wreck itself trying to swallow Bosnia.
It was german paranoia over being isolated that ended up chaining the germans to an alliance with a hopeless empire, in a hopeless position. And making a world war seem attractive to them. Germany started the World War because its rulers believed they had backed themselves into a situation where they had no alternatives. They hadn't, France and Russia were in no position to actually start a war against Germany if the germans kept themselves on the defensive, giving no cause to start one.
You seem to miss some rather obvious facts. First, after the last Morocco crisis, virtually every great power was willing to risk war. Second, the balance of power idea had effectively been dropped with the resignation of Bismarck in 1890. After that, the great powers started jostling for advantages upsetting that very balance.
Last, your whole final paragraph is illogical. 'German paranoia over being isolated' resulted from dropping the adherence to a balance of power, and was confirmed by the non-continuation of the Rücksicherungsvertrag with Russia. Germany, in fact, did not start the war; Austria did. Russia was in a perfect position to start a war against Austria, and indeed mobilized first. After this they performed well against Austria, and reasonably well, initially, against Germany. Germany's position was not considered 'hopeless' at all - at least by Germany's leaders. And if there was no war, there's obviously also no need 'to be on the defensive'. The fact of the matter is, that by 1914 all great powers expected to gain something from a 'short, happy war'. War was, in fact, expected. Unfortunately, none of these expectations quite materialized as envisioned. Such things happen, in history.
In short, it would seem that your views on the matter are somewhat... outdated.