Indeed. Overpowered, underpowered are terms that most likely have it's roots in MMORPG's. Why can't we use them for a single player game?
If I go in a dungeon and I 1-hit every enemy-NPC, I can say I am overpowered, this has nothing to do with MMO stuff.
Another good exemple are the 'nerf smithing' topics I see pop up on a lot of forums. Why nerf it?! Skyrim isn't an MMORPG! But the fact is that you can max out smithing very early in the game and thus make uber weapons and armor very early, which makes you overpowered.
Every game needs good balancing, whether it's singleplayer or multiplayer.
I think your point about the Smithing isn't right, you said it yourself, it's a single player game, therefore any 'exploit', is entirely down to the player as to whether or not to use it. It's not effecting anyone else, like it would in an MMORPG, if someone wants to use it, that's their choice. Personally I have used the dagger method to raise my Smithing, but only as I reached level 20 and felt I needed more protection, as I wasn't finding much Ebony/Daedric type armours. However someone may want a bigger challenge, and so that's where choice comes in, and being able to have self restraint.
The Mage issue is a different kettle of fish, but I don't even want to get started on that!