I agree smithing is too powerful, upgrading the armour / damage of an item by 100% or more without abusing crafting synergy is too much (especially when you then get combat perks).
Improving the base of an item by 40 is too good even for legendary status, moreso when the best base armour value is deadric armour at ~49 (and thats the only piece of the deadric set that actually gives more armour than the upgrade). This alone trivialises the armour cap, something that shouldn't be so easy to do. Weapons also become significantly harder hitting (deadric mace base of 16 yet can be improved by 20 without abuse).
The best way I could see of combatting this would be to reduce the upgrade bonuses, but equally I'm not sure it should be done as there are people who enjoy this aspect of the game and fixing this would still leave other 'god mode' options untouched (you would just see less whining on this and more on others). In the end TES has always been about choice and there has always been a choice to exploit the mechanics of the game to become a god (and in Morrowind it was just as easy), the challenge has always been what you make of it, for many that will mean waiting for the creation kit.
Im using smithing on my 2nd character too. My first had 100 and enchanting lalala.
But I have 70 smithing and stopped there.
I ONLY leveled smithing to 70 for glass weapons, once I could aqquire glass weapons myself.
And with 70 AND the perk for glass weapons, I can improve the damage quite some, but not too much. I feel its fine.
I did not want to take this, I wanted 60 for the magical perk and just add like 15% damage, but now, i can add around 30%.
Im stopping there.
Adding 100% is redicilous imo. I dont want it.
I was almost forced to do this though since the game was becoming redicilously hard for me even on Adept.
With my first character I was running through Master pressing 1 button.
Now with my bosmer archer I am playing 75% on adept, trying expert sometimes. And it feels as If Im playing Skyrim version of Dark Souls.
Yes, My level is high, 35, due to pickpocketing and a mix of skills I almost dont use. i have 50 in one handed and 40 in block but I almost never use it, I actually paid to have them trained up for the few times I might use it.
My main weapon skill is bow, at 65 only. And I can tell you, my damage at lvl 35 sux balls.
On a bandit boss, with a sneak attack with 3 times damage bonus AND a crit, I will take off around 40% health. On Adept.
And I LOVE it.
Its so challenging.
And only due to one or two things: Completely not using Enchanting. Even pickup gear that have pure damage enchants on them, I sell it.
Smithing, I just took it up but didnt have it at all earlier. My damage went up nicely but I honestly was in need of it. Im not going further, and I wont be able to upgrade ebony or daedric very good, IF I ever find one.
Im playing a game where I am limiting myself on purpose, to get a challenge. And the ONLY limit required is actually to forego enchanting skill mainly, and not maxing smithing.
Alchemy I dont have but feel free to use it to make health and mana potions. But once you start to make smithing and enchanting pots and damage potions, you are disturbing the balance.
My experience so far though: The game is made for you to have 1 secondary skill at, atleast mediocre skill.
But leaving it at mediocre makes the game rather challenging, and also incredibly fun.
Combat for me now is very involving.
I have had fights vs 3 normal bandits, or medium rare ones, that have taken up to 10 minutes, cause Im kiting, hiding. They can almost one shoot me.
And I do have an upgraded thiefs guild leather armor and I do have 200 hp, at lvl 35. But enemies hits hard even on Adept.
My experience from before when I steam rolled Master was that there hardly was a difference between expert and master, while the difference between Adept and Expert is extremly large.
Again, I dont have melee, I dont have magic damage. I do have 50 one handed yes and I have an unenchanted, semi smithed glass dagger and a glass shield.
Other then that I mainly rely on my bow. And since bows dont fire very fast, that alone is why fights takes so long time.
Soon I can get the perk for 30-35% faster firing rate with bows and that will help me alot.
Sneak: It might be overpowered at 95+ in sneak AND muffled boots.
But I have 65 in sneak at the moment, I do have the 50% noise reduction perk in Light armor. And Im spotted so fast its redicilous at times.
As soon as I fire an arrow, they see me. On multiple enemies, I will get in one sneak shot, maybe two with luck, then I need to run and kite or soak it up.
I die, alot.
Anyway, the game allows you to be a god if you want. All you need is enchanting coupled with smithing for melee, and enchanting for mages.
Stay clear of enchanting and not going above 60-70 smithing, and no alchemy, and the game is very well balanced for a very challenging adept playthrough.
I am having so much fun after I rerolled i cant describe it.
Every fight requires a sence of tactics if more then 2 enemies.
Only normal Wofls I can 1 shoot. The rest requires more.
Even the lowest bandit I cant kill with a 3*sneak damage shot. he is almost down though.