I only play on legendary, same with Fallout (very hard), I get no satisfaction any other way. My dragonborn character is pretty badass and has all three crafting skills to 100, but the game still provides a challenge depending on who you are fighting. Now I never found any real power in this game until my Evil character became a vampire last night.
I had taken the necromage perk a long time ago planning this character ahead for months. My jaw dropped once I saw the enchantments he made. With new alchemy and smithing gear I smithed a blades sword to 999 damage, this is on legendary mind you so it still does not one shot everything but it brings the pain.
The most awesome thing is DESTRUCTION MAGIC IS FINALLY USABLE AFTER 180 HOURS ON THE CHARACTER. I obtained the Krosiis (sp?) mask and only had to enchant 3 peices of gear for 100 destruction reduction. The fortify destruction potions I am making are something like 225% increase in damage and I FINALLY feel like the evil warlord I planned him out to be even on legendary. Vampires are insanely powerful.