In Balmora, even at first level, you will find one or two magic items in the crates, without fail. This has irritated me because I have never once gotten an item from this tha twas actually useful. Like, Never a main or minor skill. For instance, just a minute ago I got one Silver Staff of War from a crate...and then got a second Silver Staff of War from another crate. Good weapon. Shame I dont use blunt -_-

Are you suggesting there's something broken with your leveled lists?
Make sure you create a Mashed_List.esp with Wrye Mash, and have it load last in your Order (if you're using mods.) Otherwise, your leveled lists could be very unbalanced.

But this has always been the way the game works, and you described random quite well. The game does not give you items based on your skills.

If you don't like how you can't seem to get good armour or weapons then sell the ones you do get and make some money to buy your own. I don't see the point in this really.

I think the contents of every crate in the game that doesn't have the exact same contents each time is linked to lists of things that can appear and in Balmora the list has magical items that appear very rarely but with the number of crates in Balmora you're almost guaranteed to come across something valuable/rare sooner or later. Anyway, the number of weapon skills that aren't a major or minor are likely to be higher than the number that are major or minor unless you're playing weirdly (one or two major/minor vs something like 6 misc for normal builds). Because of that you're far more likely to find useless vendor trash than something useful.