Why was it done poorly? It has a few flaws, yes, but it's still nice to have in the game, adds a lot to role-playing.
Biggest reason?
Smithing is the only crafting skill that does not require some sort of recipe. None.
By simply picking a Perk you automatically know how to craft and upgrade every single type of armor and weapon in that Perk level.
There's no testing like in Alchemy.
There's no reverse engineering like in Enchanting.
There's nothing that gives it much achievement or meaning.
And it adds a lot of role-playing?
My single point above completely negates any "strength" it pretends to add to RP value.
This puts into exactly the same category as Speechcraft.