My issue is simply with crafting it period. Daedric armor and weapons, are summoned from the Plane of Oblivion. At least that's the way it used to be, and explained the other-wordly look to it. It wasn't of this world
Now any shmuck who practices enough can simply craft it. lolwut?
This is the real issue with skyrim:
The game designers had no idea what they were doing when they implemented such systems. It breaks immersion, continutity, and cheapens the whole experience the user has. It's the same reason why you get a constant barrage of [censored] quests, why the pacing of quests is terrible, and why things like werewolf totems are totally useless.
I feel like Bethesda hired an army of excellent world designers and level designers for Skyrim, but still kept the same exact game design/RPG design team, and never learned from the root of their mistakes (only fixing specific "issues", instead of the systems that ran them).
As far as I am aware, gameplay mechanics that are poorly implemented like Smithing are not "cannon" to the actual established lore.
No, you SHOULDN'T be able to craft dwarven armor. Bethesda didn't bother to actually implement a good way to get this though. They thought it would be a good idea to let players "give it out" like candy.
No, you SHOULDN'T be able to simply craft Daedric. They got this half right though - there is an arcane conjuration machine in the Mage College that can make Daedric armor, and requires a quest to get some special items to do so. This is a rather lore-freiendly (if shallow) way to get the armor... and then they go and make it so you can just spawn any armor anyways. Stupid? Yes.