I disagree. I did the same thing, taking only those 2 perks in smithing and limiting myself to steel armor. With 100 in heavy armor skill my armor rating with a shield is over the armor cap of 567. ie that approach ends up just as overpowered as wearing daedric and exploiting alchemy/enchanting.
You must have taken a hell of a lot of Heavy Armor perks then to get your armor rating so high, which, again, in a conscious decision.
I've played through several 1H+Shield and 2H characters. My latest one I have found to be the most balanced character I have so far created. With just a few simple rules to do with Smithing, and how it is combined with the other two crafting skills, I've found a great balance:
--> I've only taken the Steel Smithing and Arcane Smithing perks, and have been using Banded Iron Armor and Ancient Nord Armor (equivalent to normal Iron Armor) for my character simply because I love the looks and enjoy being forced to use the shield to defend, as opposed to having blows just bounce off me.
--> I invest a couple of perk points into the Shield Wall perk to make shields an effective tactical choice, and somewhat make up for my lackluster armor rating. Even at Level 53, in full heavy armor, my armor rating is only 200 - effectively 36% damage reduction. However, I have a maxed out block rating with an enchantment and perks, meaning when blocking I reduce damage by a further multiplicative 80%, meaning while blocking I effectively have 92.8% damage reduction! If I want to survive, I need to be prepared for the hits and actively block; if I'm surprised, I will take a heavy hit and lose a large chunk of my health.
--> I only allow myself to use Fortify Smithing enchanted apparel when I'm smithing my non-perked materials, e.g. Leather, Dwarven, Ebony, etc. I've limited myself to an upper limit of 80% fortification, which means that at 100 Smithing I can
just craft non-perked materials to Legendary. I've also refrained from needlessly creating items through smithing, but have been constantly upgrading weapons etc, which allows for a more natural smithing level progression.
--> I've not used any Fortify Smithing Potions at any point - not only do I find it unrealistic trying to quickly bash in as many upgrades as possible in the 30 second window, I feel combining it would just push my equipment over the enjoyable level.
--> I've not allowed myself to take any perks in the Enchanting tree apart from the first one, but as many levels of that as I want. The reasoning behind this is twofold - firstly it means the maximum +One Handed enchantment I can put on is about 32%, and the biggest Fire Damage is about 26; which is comparable if not slightly weaker than the enchantments I've found on dungeon chest items. I find this is fine, as that slightly weaker enchantment is the price I pay for full customisation. Secondly, not taking the Dual Effect enchanting perk means that dungeon loot remains relevant throughout the entire game - I was massively excited to find Daedric Gauntlets of Extreme Wielding (+35% OH) in a chest the other day, since that is something my character could never create or outdo.