If you could pay someone to improve your equipment...what would be the point of raising smithing?
Same reason you can't pay someone to enchant things....because it's a skill in the game and they want YOU to use it, not an NPC.
Then why could every shopkeeper who sold weapons and armour in Oblivion repair your gear?
I would have liked to see, as mentioned, blacksmiths who could improve your gear to a certain level (depending on your level), and only specific types of armour too, either divided between light and heavy armour, or smiths who could improve specific types of armour, orcs from the strongholds could improve orcish armour etc.
The latter would probably have been too much trouble for most people, although it would have been cool.
Also @Shagsbeard, what about Eorlund Gray-Mane then? He's the greatest blacksmith in all of Skyrim.