I wouldn't say cruel, if you are able to give them proper space requirements, but they won't be as happy as they would if they were able to get to the ground and do normal chicken things like scratching and dust bathing. You probably wouldn't have the space for larger hens so you'd be looking more at bantam breeds, which aren't the best egg layers.
Plus if you live in an apartment building your neighbors probably aren't going to be pleased with them - even if you don't have roosters, hens can be fairly loud, especially when they're singing an egg song. No louder than a dog, for sure, but if you're not allowed to have them where you are you aren't going to be able to keep them a secret.
Plus on a balcony I would think coop cleanliness will be a problem. How will you deal with the manure they produce? Will you want to haul it through your apartment to dispose of it? It's also fairly smelly if you don't keep up with it, which would probably upset your neighbors, and it will also attract flies.
All in all keeping a couple hens on your balcony is probably not the best idea.
Maybe you should look at quail. They're smaller, good layers, and their eggs are considered a delicacy. They have been selectively raised to be kept in cages and won't mind confinement at all. They're also quieter, especially if you keep no roosters.
Before anything though you better find out what is legal where you live because in an apartment setting you're going to be caught out fast if you're keeping poultry illegally.
I agree with Pyxis. If you did have a couple of house chickens, you couldn't let them be outside to exercise and do real chicken stuff, because your neighbors would notice. Not a good life for them at all.